Yesterday, the stocks in the military sector rose more and more, among which, Yonggui Electric, Zhongbing Red Arrow, CITIC Haizhi and other stocks rose significantly. It is worth noting that the military sector, which has been performing poorly in the market for a long time, has rebounded from the market in mid-February this year, and the sector index has surpassed 20%, ranking the top in the sector.
In this regard, market participants said that fundamentals and message surface resonance, superimposed market risk appetite and valuation system are switching: the unicorn of the new economy and high-tech field began to revalue, representative of the military sector Sex fighters, helicopters, armored vehicles and other companies have high barriers, high technology and high monopoly characteristics, and the value is once again recognized by the market. The three factors led to the recent rise in the military sector.
In the past two years, in addition to high valuation factors, the fundamentals have deteriorated: first, the delay in military orders brought by the military reform; second, the phased stagnation of military assets securitization in 2017, which made the military sector difficult to trend during the period. Quotes: In 2016, the Shenwan Defense Industry Index fell by 19%, ranking the fifth in the 28 first-tier industries of Shenwan. In 2017, the Shenwan Defense Industry Index fell by 17%, ranking the last in the 28 first-tier industries of Shenwan. four.
Some brokerages believe that the fundamentals of the industry have reached freezing point in 2017, and the gradual improvement in the future is a high probability event. On the one hand, the phased impact of the military reform will gradually weaken, and the growth of military product orders will be re-accelerated. There have been positive phenomena in the near future. For example, the aircraft factory Shenfei Shenfei’s profit of 706 million in 2017 has significantly exceeded market expectations, and information equipment supplier Haig Communication Military products orders landed continuously. In view of the expansion of demand from military weapons and equipment procurement practices and restructuring, the order growth of military enterprises in the next three years will be sustainable. It is expected that military orders will increase significantly in 2018, especially in key areas with new models.
On the other hand, the staged stagnation of asset securitization does not mean a cessation. After the completion of the asset reorganization and listing, AVIC Shenfei was evaluated on the SASAC website as “the aviation industry's deepening of military-civilian integration, mixed economic ownership reform and core military asset securitization. An active exploration, to pass a positive and positive attitude, military asset securitization is still the trend of the industry.
It can be seen that since 2017, major military industrial groups have been reformed, and the enterprises owned by the whole people have been transformed into state-owned sole proprietorships. The name of the enterprise has been changed from “XX Group Company” to “XX Group Co., Ltd.”, and the company’s ownership and decision-making power after restructuring Separation of management rights, powers and responsibilities are more clear, this may be to pave the way for subsequent changes and other actions.
Have long-term investment opportunities
Due to its special labeling of the military industry - "high valuation", "low performance growth and poor stability", "high volatility", "subject concept", etc., some investors choose to evade it. On the other hand, the stocks such as AVIC, AVIC, and Zhongzhi have rebounded from the bottom and have not shown signs of peaking. The conflict between cognition and phenomena has caused investors to be confused about the configuration of the military sector.
Shen Wan Hongyuan analyst pointed out that the medium and long-term basic orientation of the military industry sector is good, and the short-term emotional catalysis brings a rebound. In the future, it is expected that the middle and long-term market will be driven by leading stocks. In the medium and long term, with the changes in the international situation and the stabilization of domestic policies, a firm and strong army is an important component of the concept of a strong country. With the gradual advancement of a strong military policy, the certainty and urgency of the new goal of the strong military are strengthened. Long-term investment opportunities exist for military workers due to many favorable factors such as procurement cycle, model release, order confirmation and policy-intensive release.
We are optimistic about the investment opportunities in the three major areas of military aircraft, tanks, infantry fighting vehicles and helicopters. It is recommended to deploy targets with safety margins, and recommend varieties that have both growth and valuation, or growth to determine low valuations or scarcity.
|Fund code||Fund abbreviation||Nearly one month's earnings||Handling fee||operating|
|001266||SDIC UBS Lucky Mix||13.29%||1.50% 0.15%||buy Account opening|
|002251||Huaxia military safety mix||11.42%||1.50% 0.15%||buy Account opening|
|001679||Qianhai Open Source China Scarce Assets Mix A||11.13%||1.50% 0.15%||buy Account opening|
|000800||Chinese business future theme mix||8.46%||1.50% 0.15%||buy Account opening|
|002983||Long letter defense military quantitative mixing||7.59%||1.50% 0.15%||buy Account opening|
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