Core view:
The proportion of 22q1 fund positions fell, and it may be suppressed first and then increased in 22 years. In 2022q1, affected by the expectation of interest rate increase by the Federal Reserve and the conflict between Russia and Ukraine, the military industry sector retreated sharply, the fund position adjustment / reduction was obvious, and the proportion of institutional positions decreased to 3.72%, with a year-on-year increase of 1.06pct and a month on month decrease of 1.38pct. At the current time point, we believe that the medium and long-term investment value of the military industry sector is further highlighted. From the perspective of the whole year, the fund position index may be suppressed first and then increased.
The concentration of fund military positions increased significantly month on month. The position concentration in 2022q1 was 77.76%, up 16.26pct month on month. From the point of view of the breakdown track from the breakdown track, from the subdivision track, the field of military components represented by the Unigroup Guoxin Microelectronics Co.Ltd(002049) and Tianjin 712 Communication & Broadcasting Co.Ltd(603712) are the representatives of the aviation industry chain, which is favored by institutional investors because of its high industry prosperity.
The military industry sector is still in an oversupply state. 2020q3 is the inflection point of the trend of sector over allocation proportion. In 2021, the proportion rose quarter by quarter, and 21q4 rose to a high point in recent ten years, with an over allocation proportion of 1.89%. The proportion of excess allocation in 2022q1 has dropped significantly to 1.23%, but it is still in the positive range. As one of the sectors with high prosperity and improved certainty, the military industry sector will become the new normal.
Investment suggestion: the investment value of the military industry sector is prominent, and it is suggested to trade time for space. In the short term, under the background of the Russian Ukrainian conflict and the Federal Reserve’s interest rate hike, the market risk appetite has dropped sharply, the risk assets have retreated sharply, the military industry index has fallen by nearly 33% year to date, and the valuation risk has been further released. At present, the PE (TTM) of military industry sector is about 44x, which is lower than the central level of 57x, and the valuation quantile is 21%. We believe that the downstream demand of the military industry is highly planned and still strong. With the gradual stabilization of China’s epidemic and market sentiment and the continuous promotion of capacity expansion in the superimposed industry, the linear extrapolation of the annual performance of the military industry sector based on the 21-year high growth will still be established, the investment value of the sector is prominent, pay attention to the performance and continue to determine high growth stocks. Suggested “four dimensions” configuration: 1) aviation industry chain, including Avic Jonhon Optronic Technology Co.Ltd(002179) ( Avic Jonhon Optronic Technology Co.Ltd(002179) . SZ), Nanjing Quanxin Cable Technology Co.Ltd(300447) ( Nanjing Quanxin Cable Technology Co.Ltd(300447) . SZ), Baoji Titanium Industry Co.Ltd(600456) ( Baoji Titanium Industry Co.Ltd(600456) . SH), Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) ( Guangdong Shenglu Telecommunication Tech.Co.Ltd(002446) . SZ); 2) Missile industry chain, including Beijing Relpow Technology Co.Ltd(300593) ( Beijing Relpow Technology Co.Ltd(300593) . SZ), Chengdu M&S Electronics Technology Co.Ltd(688311) ( Chengdu M&S Electronics Technology Co.Ltd(688311) . SH), Chengdu Zhimingda Electronics Co.Ltd(688636) ( Chengdu Zhimingda Electronics Co.Ltd(688636) . SH), Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) ( Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) . SH); 3) The objects benefiting from the improvement of localization rate include Nancal Technology Co.Ltd(603859) ( Nancal Technology Co.Ltd(603859) . SH), Unigroup Guoxin Microelectronics Co.Ltd(002049) ( Unigroup Guoxin Microelectronics Co.Ltd(002049) . SZ) and China Zhenhua (Group) Science & Technology Co.Ltd(000733) ( China Zhenhua (Group) Science & Technology Co.Ltd(000733) . SZ); 4) The targets of performance growth improvement by SOE reform include Avic Xi’An Aircraft Industry Group Company Ltd(000768) ( Avic Xi’An Aircraft Industry Group Company Ltd(000768) . SZ), Tianjin 712 Communication & Broadcasting Co.Ltd(603712) ( Tianjin 712 Communication & Broadcasting Co.Ltd(603712) . SH), Avicopter Plc(600038) ( Avicopter Plc(600038) . SH) and China Avionics Systems Co.Ltd(600372) ( China Avionics Systems Co.Ltd(600372) . SH).
