the growth of revenue and profit accelerated, and the industry showed a high boom. In the first quarter of 219, the overall operating income of the military sector was 67.681 billion yuan, a year-on-year increase of 17.74%; The net profit of returning to the mother was 2.227 billion yuan, a year-on-year increase of 33.7%. On the one hand, the accelerated growth of revenue and net profit attributable to the mother reflects the sustained growth of the industry; On the other hand, in the late 13th Five-Year Plan period, military procurement accelerated and industry growth accelerated.

aviation performed brilliantly, and ship revenue stabilized. In terms of sub-industries, the revenue of aviation, shipping and information technology sectors increased, with the aviation sector having the highest growth rate, reaching 36.6%; In terms of net profit, aviation, aerospace and weapons achieved growth, with the aviation sector having the highest growth rate, reaching 98.9%. In vertical comparison, the growth rate of revenue and net profit of aviation sector is accelerating, and the growth rate is constantly improving; The revenue of the shipping sector has stabilized and rebounded, but the profit has declined and the profitability has not yet recovered.

upstream and downstream * * * vibration, and the supporting facilities of the main engine all increased. In Q1, 219, the revenue of main engine and supporting enterprises showed a high growth trend, and the median growth rate of five representative main engine factories was 2.36%. The median growth rate of representative supporting enterprises is 21.56%; Both upstream and downstream of the industrial chain show a high degree of prosperity. On the basis of the industry entering a high boom stage in 218, the current industry has entered a state of high procurement and high delivery. At the same time, the growth of data such as advance payment, advance payment and inventory indicates that the demand for products is expected to improve further.

the overall position declined, and the flexible target was favored. Based on common stock funds, hybrid funds and flexible allocation funds, this paper analyzes the allocation of military sector funds. At the end of the first quarter of 219, the fund's heavy holdings in military targets accounted for 1.25%, with a low allocation of .44%, and the allocation declined. In terms of individual stocks, the target of institutional heavy positions has remained relatively stable. At the same time, the stocks with a large improvement in fundamentals have also been recognized by institutions, and their positions have been significantly increased.

industry rating: thanks to the acceleration of equipment procurement in the late 13th Five-Year Plan period, the prosperity of the military industry has been further improved, and revenue and performance growth have become the main tone of the industry. The performance growth rates of OEMs and supporting enterprises are both high, indicating that the industry has entered a high prosperity state of high procurement and high delivery. In addition, we are optimistic about the performance of the military industry this year and give a recommendation rating by superimposing the improvement of the fundamentals of the industry such as the reform of state-owned enterprises and the securitization of military assets.

risk warning: 1) military procurement is less than expected; 2) The profit of the enterprise is less than expected; 3) the uncertainty of the reform of state-owned enterprises and the securitization of military assets; 4) Systemic risk.

this article is from guohai securities

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