1. Targets with substantial and intensive reform; targets that participate in military industry M&A funds and mixed-ownership reforms within the system; targets with good fundamentals for asset injection and reasonable pro forma valuation levels; potential leading civil-military companies with large room for growth and sustained performance Targets with strong growth certainty; thematic investment targets brought about by the continuous changes in the international and surrounding situations.

2. Military equipment updating and export; the expansion of third-generation equipment and the application of new combat styles; demand for missiles and arrows; commercial aerospace development; aerospace engine industry chain; infrared industry; and national defense information industry chain.

At the same time, the stocks recommended in the 2017 annual strategy reports of the national defense and military industry of these 12 securities firms are:

Aerospace Morning Light, Sichuan Electronics, Aerospace Power, Aerospace Electronics, Zhenhua Technology, Aerospace Changfeng, AVIC Sanxin, Guihang Airlines, China Direct Holdings, Hongdu Airlines, Rifa Precision Machinery, Hangxin Technology, Steel Research High Sodium, AVIC Electric Testing, AVIC Aircraft, AVIC Electronics, AVIC Electromechanical, Hezhong Strong, Torch Electronics, Hangxin Technology, Quanxin Shares, Xinyan Shares, Guorui Technology, China Heavy Industries, AVIC Power, Sichuan University Zhisheng, Fiyta A, Dali Technology, Neiwei Technology, Sichuan Jiuzhou, China Heavy Industries, Aopu Optoelectronics, Jingjiawei, Xinyan Co., Ltd., Hailanxin Co., Ltd., Wanze Co., Ltd., and Dingli Technology.