Investment advice
[core combination] Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avicopter Plc(600038) , Aecc Aviation Power Co Ltd(600893) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avic Shenyang Aircraft Company Limited(600760) , Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) , Unigroup Guoxin Microelectronics Co.Ltd(002049) , Western Superconducting Technologies Co.Ltd(688122) , China Cssc Holdings Limited(600150) , China Marine Information Electronics Company Limited(600764) , Beijing Aerospace Changfeng Co.Ltd(600855)
[Key stock pool] Avic Heavy Machinery Co.Ltd(600765) , Avic Electromechanical Systems Co.Ltd(002013) , Aecc Aero-Engine Control Co.Ltd(000738) , Avic Aviation High-Technology Co.Ltd(600862) , Sinofibers Technology Co.Ltd(300777) , China Avionics Systems Co.Ltd(600372) , Fushun Special Steel Co.Ltd(600399) , Gaona Aero Material Co.Ltd(300034) , Jiangsu Toland Alloy Co.Ltd(300855) , Western Superconducting Technologies Co.Ltd(688122) , Baoji Titanium Industry Co.Ltd(600456) , Weihai Guangwei Composites Co.Ltd(300699) , Xi’An Triangle Defense Co.Ltd(300775) , Chengdu Leejun Industrial Co.Ltd(002651) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Wuxi Hyatech Co.Ltd(688510) , Wuhan Guide Infrared Co.Ltd(002414) , Zhejiang Dali Technology Co.Ltd(002214) , Xi’An Bright Laser Technologies Co.Ltd(688333) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Fujian Torch Electron Technology Co.Ltd(603678) , Chengdu Zhimingda Electronics Co.Ltd(688636) , Raytron Technology Co.Ltd(688002) , Beijing Beimo High-Tech Frictional Material Co.Ltd(002985)
[last week’s report][ Western Superconducting Technologies Co.Ltd(688122) ] depth: rising star of superalloy, high growth of three major businesses
[views of this week] (1) the aviation industry held a 2022 working meeting to emphasize the three-year action to win the reform of state-owned enterprises. In 2021, the net profit was 16.8 billion yuan, a year-on-year increase of + 8% (the target at the beginning of 2021 was + 4%), and in 2022, the net profit was 18.2 billion yuan (a year-on-year increase of + 8%, compared with 4% in 2021), realizing 2323 balanced delivery for the first time. One of the key tasks in 2022: focus on reform and achieve the end of the three-year action of state-owned enterprise reform. (2) The second CSSC global cooperation conference was held in Shanghai: the relocation of the group headquarters to Shanghai is a new starting point for in-depth integration and development with world shipping and global partners. (3) Endogenous epitaxial two wheel drive: the military industry has made a lot of adjustments at the beginning of the year, and is optimistic about the military industry from 2022 to 2023. The index has 60% + room for rise; In 2022, as the last year of the “three-year action plan” of state-owned enterprises, the mixed reform / incentive / asset securitization will be comprehensively promoted, the exogenous growth will exceed expectations, and the military industry will welcome the sweet period of endogenous + epitaxial growth for the first time.
[core view] the deterministic growth of national defense is high. In 2022, it will enter the two wheel drive sweet period of “business cycle + asset integration” and “endogenous + extension”, and “domestic demand + foreign trade” and “military products + civilian products”. The military industry index is expected to replicate the performance of the wind power index in the second half of 2021 in 2022, and the latter ranks first: (1) the deterministic growth of national defense industry is high under the “century change”. “Preparing for war / 2027 / building a strong national defense commensurate with the second largest economy” is the established direction. Large contract liabilities in 2021 highlight the high boom of the 14th five year plan. (2) In the next few years, the securitization of national defense and military assets and the reorganization and listing of core military products are expected to set off a new climax. CSSC’s companies have started restructuring, and the restructuring of the top ten military industrial groups is expected to increase significantly. Pay attention to the restructuring process of CSSC / Aerospace Hi-Tech Holding Group Co.Ltd(000901) / CETC / AVIC / Aerospace Science and industry / ordnance industry and other groups. (3) China’s main battle tank / UAV / Trainer / fighter have global competitiveness, and the demand for foreign trade will gradually rise. Domestic large civil aircraft / civil aviation engines and other industrial chains are also gradually growing. Defense and military industry: we are optimistic about the missile / information technology / Aviation Development / military aircraft sub industry, scale effect + refined management, “small core and large cooperation”. The performance of national defense mainframe will be flexible in the next five years. With the conclusion of the “three-year action of state-owned enterprise reform”, equity incentive is expected to accelerate the release of performance: Avic Xi’An Aircraft Industry Group Company Ltd(000768) , Avicopter Plc(600038) , Aecc Aviation Power Co Ltd(600893) , Jiangxi Hongdu Aviation Industry Co.Ltd(600316) , Avic Shenyang Aircraft Company Limited(600760) , Inner Mongolia First Machinery Group Corporation Co.Ltd(600967) , China Cssc Holdings Limited(600150) .
2. Continue to be optimistic about high-tech barriers, high scarcity and competitive high-temperature alloy / composite materials / midstream component level supporting enterprises / engine forging castings / information core midstream and other midstream and upstream sub circuits: Avic Heavy Machinery Co.Ltd(600765) , Fushun Special Steel Co.Ltd(600399) , Gaona Aero Material Co.Ltd(300034) , Western Superconducting Technologies Co.Ltd(688122) , Anhui Yingliu Electromechanical Co.Ltd(603308) , Chengdu Leejun Industrial Co.Ltd(002651) , Wuxi Paike New Materials Technology Co.Ltd(605123) , Guizhou Aviation Technical Development Co.Ltd(688239) , Xi’An Triangle Defense Co.Ltd(300775) , Wuxi Hyatech Co.Ltd(688510) , Avic Electromechanical Systems Co.Ltd(002013) , China Avionics Systems Co.Ltd(600372) , Xi’An Bright Laser Technologies Co.Ltd(688333) , Jiangsu Toland Alloy Co.Ltd(300855) .
3. Missile and informatization: Unigroup Guoxin Microelectronics Co.Ltd(002049) , Fujian Torch Electron Technology Co.Ltd(603678) , China Zhenhua (Group) Science & Technology Co.Ltd(000733) , Chengdu Zhimingda Electronics Co.Ltd(688636) , Wuhan Guide Infrared Co.Ltd(002414) , Zhejiang Dali Technology Co.Ltd(002214) .
Key bullish on defense Hong Kong stocks: AVIC.
Risk tips
1) the development progress of advanced models is less than expected; 2) Equipment procurement volume or delivery confirmation rhythm is lower than expected
