Original article title: Chinese stock market: Military stocks already have the value of core-line investment, and the high situation can be seen for more than five years!

When it comes to military stocks, in the past, the impression given to people was that of playboys, with poor sustainability, incomplete, transparent and unstable performance and many other criticisms.

Nowadays, military industry stocks have changed significantly, and the playboys of the past now have the essential logic of mid-line investment.

In the past three months, the CSI Military Industry Index has increased by nearly 40%!

It has become the sector with the largest increase after the three major runway sectors.

Compared with the impressive performance in the first quarter report, people are still skeptical about the situation of the new energy industry, so the market has not reflected enough. With the gradual release of the semi-annual report, the market capital gradually recognizes its excellent future situation.

, I have already analyzed this change in depth in previous articles: after the semi-annual report, military industry stocks may become the focus of financial attention!

As of last week, 14 listed companies in the military industry have released their reports for the first half of 2021. Among them, 12 listed companies have achieved year-on-year increases in net profits attributable to their parent companies or have turned losses into profits.

As of today, 73 companies have announced performance estimates for the first half of 2021. Among them, 49 companies are expected to achieve a year-on-year increase in net profit, 5 companies are expected to achieve a year-on-year decrease in losses, and 15 companies are expected to achieve a year-on-year increase in net profit.

It is estimated that a loss is likely to occur.

Five companies are expected to see net profits increase by more than 100% year-on-year.

From the perspective of fundamentals, the delivery of military products has reached the best level in history, and for the first time in the first half of the year, it has achieved a high level of more than half of the time and more than half of the delivery.

From the perspective of current policies, my country's strategy of "a big country must strengthen its country", the increase in funding, and the changes in the international environment have all brought unprecedented opportunities to the new energy industry. In my country's goal of strengthening the country, it has Up to the new strategic height, the Chinese military will accelerate "compensatory development" under the strategic transformation of national defense and security, and the new energy industry already has a clear foundation for growth in the medium and long term.

As the high performance gains of key stocks in the first quarter and semi-annual reports are gradually realized, it is expected that the third quarter may become an important node to verify the logical transformation of military stocks. Therefore, the entire sector already has good room for growth.

And the contribution margin rate, the value of centerline investment has already been revealed.

From the perspective of investment value, although military industry stocks have experienced very good gains recently, due to the deep early adjustment and the high future situation of the new energy industry, the company's valuation is still within the effective range.

From the perspective of investment direction, several aspects are the focus of attention: Automobile manufacturers: The logic of growth mainly depends on the prediction of changes in the entire industry chain.

In the current military industry chain, most of the final companies that produce weapons are automobile manufacturers within military industrial groups. At the same time, during the production process, there are sales and purchase relationships between server manufacturers and upstream, midstream and downstream companies.

Jointly and severally, if in the future consumers grant the right to purchase materials to server manufacturers, the status of server manufacturers will be further enhanced.

Upstream and downstream materials: The recently popular lithium battery sector has made people aware of the importance of upstream and downstream materials. For the new energy industry, the requirements for upstream and downstream materials are logically the same and will be more critical.

Because military products generally require high-end raw materials for upstream and downstream raw materials, including special steel, high-end aluminum alloys, carbon fiber and composite superconductors, etc.

Information management and intelligence: In the current development trend of information management and intelligent systems, the logic of the military industrial chain in the future may gradually transform from "production and manufacturing to" intelligent manufacturing. Artificial intelligence technology, cloud computing technology,

High-end chips may be widely used in radar detection, network information security, laser weapons, etc.

Among them, electronic devices such as military MLCC, optical components, and infrared detectors have benefited greatly.

Among listed companies, Zhenhua Technology, Hongyuan Electronics and Torch Electronics are industry leaders in the domestic production and manufacturing of electronic devices.

In terms of optical components, companies such as AVIC Optoelectronics, Aerospace Electrical Appliances, and Quanxin Co., Ltd. have good growth prospects.

In terms of infrared detectors, Ruichuang Micro-Nano and Amap Infrared are at the leading level in the industry.

The intelligent defense system is represented by network security technology resistance and unmanned aerial vehicles.

Cyber ??warfare, high-precision weaponry and unmanned aircraft may become a key part of modern warfare.

At present, the 10-year PE-TTM historical time index of military stocks is 58.07%. Taking into account the rapid valuation changes caused by the high situation in recent years, the current valuation of the sector is still in a negative correlation. As the situation of military stocks increases,

With continuous improvement, organizational assets may gradually be equipped with relevant high-quality standards.

The market trends in the semi-annual report show that the oligopoly market companies that organize the mid- to long-term military runway have already laid out their plans.

In the next five years, the prosperity index of the aerospace and military industry may enter a cycle of accelerated growth.