Core view
At the end of the three-year action of state-owned enterprise reform, SASAC again proposed to strengthen the injection of high-quality assets into listed companies. On May 18, the state owned assets supervision and Administration Commission of the State Council proposed to continue to strengthen the injection of high-quality assets into listed companies at the special promotion meeting on deepening the reform of state-owned holding listed companies and striving to be an example of state-owned enterprise reform. The group company shall systematically sort out the unlisted and listed resources, and gradually inject the existing unlisted high-quality assets into the listed company in a planned way in combination with the actual situation. If necessary, it can also be listed separately. Strengthen the cultivation and reserve of listing resources, and incubate a number of high-quality resources with strong scientific and technological innovation strength and good market prospects to connect with the capital market. The three-year action of state-owned enterprise reform has entered the final year. With the promotion of reform, the securitization of military assets is expected to accelerate.
In 2021, the total output value of China Spacesat Co.Ltd(600118) navigation and location service industry will reach 469 billion yuan. On May 18, China Spacesat Co.Ltd(600118) navigation and positioning Association released the 2022 China Spacesat Co.Ltd(600118) navigation and location service industry development white paper in Beijing. According to the white paper, the total output value of China Spacesat Co.Ltd(600118) navigation and location services reached 469 billion yuan in 2021, an increase of 16.29% over 2020. Among them, the core output value of the industry, including chips, devices, algorithms, software, navigation data, terminal equipment and infrastructure directly related to the R & D and application of satellite navigation technology, increased by about 12.28% year-on-year, reaching 145.4 billion yuan, accounting for 31% of the total output value, and the growth rate was higher than that of the previous year. The related output value derived from satellite navigation applications and services increased by about 18.20% year-on-year to 323.6 billion yuan, accounting for 69% of the total output value.
The boom expansion of the industrial chain is conducted in an orderly manner, and the value of sector allocation is highlighted. Under the influence of market sentiment and other factors, the military industry sector has experienced a sharp correction since 2022, and the CSI military industry index has fallen by 27.3% this year. The logic of industry boom expansion remains unchanged. The verification of advance receipts by downstream enterprises and the landing of large orders will be conducted in an orderly manner to the upstream and midstream along the industrial chain. During the “14th five year plan” period, the demand of supporting enterprises is highly deterministic. The CSI military industry index is valued at 53 times, which is at the 8% quantile value of historical PE, and continues to be optimistic about the value of sector allocation at the current position.
Grasp the main line of aviation equipment investment, and military electronics has high independent and controllable growth. 1) The contract liabilities of the main engine factory + the verification of the advance payment, and the growth of the aviation industry chain will continue to be realized. The performance transmission is effective. From the main engine plant and engine system, to the body system and parts, and then to the upstream raw material sector, the whole industry chain has strong momentum and certainty. The main engine manufacturer pays attention to Avic Shenyang Aircraft Company Limited(600760) , Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avicopter Plc(600038) , Aecc Aviation Power Co Ltd(600893) ; The body system pays attention to Avic Electromechanical Systems Co.Ltd(002013) , China Avionics Systems Co.Ltd(600372) , Aecc Aero-Engine Control Co.Ltd(000738) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985) ; Attention to aviation forgings and parts Avic Heavy Machinery Co.Ltd(600765) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Xi’An Triangle Defense Co.Ltd(300775) , Chengdu Ald Aviation Manufacturing Corporation(300696) ; Attention to metal materials Fushun Special Steel Co.Ltd(600399) , Western Superconducting Technologies Co.Ltd(688122) , Baoji Titanium Industry Co.Ltd(600456) , Gaona Aero Material Co.Ltd(300034) , Jiangsu Toland Alloy Co.Ltd(300855) ; Composite materials focus on Avic Aviation High-Technology Co.Ltd(600862) , Weihai Guangwei Composites Co.Ltd(300699) , Sinofibers Technology Co.Ltd(300777) . 2) The certainty of missile weapons and equipment benefits from practical military training, and the independent and controllable military electronics in the field of high-end equipment brings high growth. Pay attention to Beijing Yuanliu Hongyuan Electronic Technology Co.Ltd(603267) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Avic Jonhon Optronic Technology Co.Ltd(002179) , Guizhou Space Appliance Co.Ltd(002025) , Chengdu Rml Technology Co.Ltd(301050) , etc.
Risk tip: the epidemic repeatedly affects the macroeconomic environment; Equipment R & D progress and procurement progress are less than expected; Military procurement prices fell; Industry competition intensifies.
