Today (May 5), as the first trading day after the festival, market sentiment continued to pick up. Both Shanghai and Shenzhen indexes were red. The Shanghai Composite Index rose for four consecutive trading days, while the gem index fell by more than 1%. In terms of individual stocks, more than 3500 shares in the two markets rose and more than 100 shares rose. On the whole, may ushered in a good start. In terms of sectors, the national defense and military industry sector rose sharply today. As of the close, Chengdu Jouav Automation Tech Co.Ltd(688070) , Guizhou Space Appliance Co.Ltd(002025) , Lihang technology rose by the limit, Tongyi Aerospace rose by nearly 19%, and Chengdu Zhimingda Electronics Co.Ltd(688636) , Nanjing Quanxin Cable Technology Co.Ltd(300447) , Gaona Aero Material Co.Ltd(300034) , Chengdu Ald Aviation Manufacturing Corporation(300696) and other stocks led the gains.
Note: performance of military industry sector today (closing on May 5)
the first quarterly report continues to be prosperous, and the performance elasticity of aviation zero and military electronics is high
Recently, a number of listed military companies have disclosed performance reports. On the whole, the prosperity of the industry continues. According to the first quarterly report of more than 100 enterprises that have been disclosed, 76.5% of the enterprises’ net profit attributable to the parent company in the first quarter achieved positive growth. Among them, the growth rate of North Navigation Control Technology Co.Ltd(600435) performance (net profit attributable to parent company) exceeded 26 times, ranking first in the growth rate list, followed by Guangzhou Hi-Target Navigation Tech Co.Ltd(300177) , Guanglian Aviation Industry Co.Ltd(300900) (turning losses year-on-year), and the net profit attributable to parent company also increased more than 10 times year-on-year Sichuan Chengfei Integration Technology Corp.Ltd(002190) , Beijing Zhongkehaixun Digital S&T Co.Ltd(300810) , Xi’An Chenxi Aviation Technology Corp.Ltd(300581) , Tongyi aerospace and other more than ten companies doubled their performance growth.
Note: enterprises that doubled the growth rate of the first quarterly report of the military industry (as of May 5)
From the perspective of industrial chain segmentation, according to Citic Securities Company Limited(600030) statistics, military industry sector’s upstream core target performance maintains rapid growth, among which aviation parts and military electronics have high performance flexibility . 22q1 new material sector realized a net profit of 1.335 billion, with a year-on-year increase of 23.26%. With the impact of local epidemic and the gradual stabilization of raw material prices, driven by the full demand of downstream, the annual performance growth of new material sector is expected to accelerate; The net profit attributable to the parent company of the aviation parts sector was 796 million, with a year-on-year increase of 78.02%. Affected by the “small core and large cooperation”, the performance of the aviation parts sector is expected to maintain a high-speed growth trend; The military electronics sector realized a net profit of RMB 2.932 billion, a year-on-year increase of 33.36%. Considering the gradual recovery of the supply chain after the epidemic is alleviated, the military electronics sector can expect high growth throughout the year.
sector has entered the bottom of valuation, highlighting the long-term allocation value
Since the beginning of the year, the military industry sector index has continued to weaken. As of the closing today (May 5), the sector index has fallen by nearly 32% in the year, and more than 20% of the stocks have fallen by more than 40% this year. Among them, the shares of five stocks have halved. As the index and individual stocks continued to fall, the military industry sector also entered the bottom position of historical valuation. According to the statistics of Citic Securities Company Limited(600030) Research Report, the overall valuation of the military industry has fallen back to the bottom position in the past five years, and the PE valuation of most core cursors in 2022 is only 25-30 times.
Huaxi Securities Co.Ltd(002926) pointed out that the valuation of national defense and military industry is in a low position, which is in sharp contrast to the undervalued value. The contract liabilities, inventory, prepayment and other subjects of military enterprises have increased significantly, indicating that enterprises have full orders, actively prepare for production and goods, the production and operation continues to improve, the development momentum is full, and the industry is in the stage of boom expansion. In addition, the military industry is a typical internal circulation industry. It has the attribute of countercyclical. It is not affected by the epidemic situation and macro-economy. Forced by international geopolitical conflicts and surrounding tensions, the growth is deterministic.
In terms of industry benefit targets, Citic Securities Company Limited(600030) pointed out that the phased adjustment will not change the high prosperity of the industry or its long-term positive trend. Although the short-term rebound space is expected to be affected by the market style and overall risk preference, it has long-term allocation value. Related subjects include:
(1) a chain of aviation industry: a recommendation for the industry chain of the flying industry: a recommendation for the industry chain: a recommendation for the industry chain of the industry chain: the industry chain of the flying industry: a recommendation for the ”’ \
2) missiles: recommend Unigroup Guoxin Microelectronics Co.Ltd(002049) , Hubei Feilihua Quartz Glass Co.Ltd(300395) , and pay attention to Beijing Relpow Technology Co.Ltd(300593) ;
3) military electronics: recommended China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Avic Jonhon Optronic Technology Co.Ltd(002179) , Tianjin 712 Communication & Broadcasting Co.Ltd(603712) ;
(4) military aircraft: recommend to be recommended for a military aircraft: recommended for the ‘ 35.
