"Military industry in depth report one" Military 2015: National defense and economic double drive 35 quotes

"Military industry in depth report one" Military 2015: National defense and economic double drive 35 quotes

I Investment I Investment (No.: ITOUZI8) "VIP Club" aims to build a professional industry chain research community. Through the pooling of industry experts, industry analysts, PE/VC, listed companies and industrial executives and professional investors, we conduct an in-depth, comprehensive and forward-looking industrial chain research to explore investment opportunities in equity and stock markets. West Point A (I Investment Research Institute-the chief researcher of military Beidou research team, I investment VIP member)

1, for 2015 years of military industry, I personally is strongly optimistic, but play the military must grasp the quality of military and military stocks and the characteristics of the huge volatility, for the 2015 military industry thinking, after one months of the idea, research and writing, has been completed, divided into the upper, middle and lower three parts, Will be a succession of friends to make brick pointing.

2, the main point of view: For 2015 years of military stocks, my judgment is to digest the valuation first, and then continue to the market. At the end of 2014 a variety of policies, performance expectations naturally will not be satisfactory, this is the basis for differentiation, the basis for the continuation of the market is the military environment in the defense and economic two levels of continued to good, this is not a short-term impulse stimulus elements, but a 35-year long-term fundamental background. What about next year's opportunity for the military? What are the specific targets worth focusing on? In this paper, we will continue to study the specific investment direction and key target of the 2015 years in-depth.

2013, since 2014, the military sector has greatly won the CSI 300 index, has become a beautiful landscape of the capital market, if 2013 years of military market is still benefiting from the influence of the surrounding situation and the traditional asset injection of expectations, Then the 2014 military stocks directly under the influence of the 18 plenary set up the National Safety Commission, the impact of asset injection, research institutes, "two machine" special, unmanned aerial vehicles, large aircraft and Beidou navigation industry development and so on are the direct stimulus factors of military sector. This article from the recent two years of capital market military sector performance, military macro background, military industry pattern evolution three aspects to re-examine the driving variables of military stocks, re-comb the military stocks 2015 years of investment opportunities and risks.

Each industry's macro background has its own characteristics, military stocks are the same, the military unit is crucial to the macro-factor is nothing more than two points, one, the security situation in the field of defense how, plainly, there is no war risk and possibility, including local conflict, buy gold in the troubled times to buy military. Second, the country's economic strength, that is, there is no money to vigorously develop the military industry. Military industry is not only the important foundation of national military power, but also the organic part of national economy.

The macro background of military industry needs to consider the situation and policy of both national defense and economy. The following first from the two years of military stocks of the operation of the context of the replay began our topic.

First, the past two years of military market is how to deduce?

In 2013, the military stocks were dominated by four waves: The first wave was 1、2、3月份, the driving factor was the escalation of the Diaoyu Islands and the suspension of aviation power (SH600893) to plan major asset restructurings. The second wave for 5 June, the main driving factors for the deterioration of the South China Sea and China Heavy Industry (SH601989) suspension planning asset injection matters; The third wave is 9, October, from the situation in Syria and China's heavy industry licensing announcement of non-public release plans and other factors driven; the last wave was November, The main drivers are the 18 plenary resolution, the establishment of the National Security Council, the promotion of further reforms in the field of defense and the military, and the exceeding expectations of subsequent policies, such as the approval of navigation and the identification of air defense areas.

The 2013 military industry, although the overall strong potential, but the logic behind is still the traditional surrounding situation and asset injection expectations. The 2014 military stock market is in the reform and restructuring of the expected start. It is divided into three main stages:

The first stage , the beginning of the year, the North bucket navigation, national security as the representative of the rise of military information sector. From the end of 2013 to the first quarter of 2014, the leader of the military sector is the Beidou navigation and national security two areas, to vibration core technology (SZ300101), Hagrid Communications (SZ002465), the Great Wall Information (SZ000748), the Guardian (SZ002268), With the side of the national Core (SZ002049) as the representative of the military-based information stocks led the military stocks began the first wave of rise. This surge is mainly focused on the defense security, military information construction related software, hardware and information equipment manufacturers.

In the second phase,in May, the Integrated (SZ002190) injection of AVIC's defense assets triggered a second wave of market prices. Into the fly integration from the re-licensing of about 16 yuan, up to 72 yuan, the completion of the increase in market value of more than 80 billion, and the main military ship business in China Heavy industry market value, the future will be the capital market, one of the leading stocks of military stocks, together with China's heavy industry, the construction of a-share market military blue-chip The injection case of the integration of fly-in has directly triggered the anticipation of the asset injection and scientific research institutes of the Aerospace Technology (SZ000901) group, the Aerospace Engineering group, the Ordnance Industry Group and the Electric Branch group. In space science and technology, aerospace electronics, Northern shares, Glarun technology, four electronics and other stocks led by the military industry This section has ushered in a vigorous overall market.

The third stage,beginning in September, Nantong Science and Technology (SH600862), Fujian fu Hair of the re-licensing led the military market reached the climax of the year. Nantong Science and Technology in September to release the reorganization plan, the company intends to buy through a series of equity transfer, fixed acquisition and other transactions, the purchase of AVIC, excellent materials, Beijing Airlines and excellent material Bermuda 100% Equity, the actual control will be changed from Nantong National Capital to AVIC industry. Nantong Science and technology will become the AVIC industrial system specializing in aviation new materials business, CNC machine tools and aviation equipment business capital operation and industry integration platform.

Fujian fu Fat A (SZ000547) directly from the private holding changed as a state-owned military holdings, the company proposed to raise capital of nearly 2 billion yuan to buy 100% of Nanjing Changfeng, from a power generation equipment enterprises to communicate, electromagnetic security and radio frequency simulation as the main business of military information platform-based enterprises, The actual control of the company will also be changed to China Aerospace Science and engineering group.

Canton Ship International (SH600685) through the acquisition of Huangpu Wen Chong Shipyard will become the first a+h military listed, Canton Ship International This proposed acquisition of Huangpu Wen Chong, is the South China military ships, special engineering ships and marine engineering major construction base, but also the current Chinese dredging engineering ship and feeder container ship the largest and strongest production base, Will further enhance the strength of the company's military ship construction, in addition to large surface ships and other warships and military auxiliary ship full coverage.

Military group assets injected into the platform of listed companies, Guang-ship international representative of the traditional injection path, and aviation power, China heavy industry, into the integration of similar, it is worth noting that this year, the military merger and reorganization has a new change to Fujian Fu FA A, Nantong science and technology, such as the representative of the "People to the Army" way, Opened the new path of military assets securitization.

These three have a major impact on the restructuring and injection of the military stock market to the climax of 2014 years, the top ten military group shares most of the trend began the last madness, after the upsurge of public calm down, the capital market is always in the hyper and negative two extremes in the loop, After a wave of performance of the military stock market has been brewing a large number of bubbles, the face of military stocks at the moment need more than a sober, less a tipsy.

The 2014 military stock market, from the Beidou navigation, the National security field began, gradually to the asset injection and the reform and transfer of the Institute, there has been a new merger and acquisition of civil and military integration, the interpretation of a complete round of the market, not only is the traditional peripheral situation stimulation and asset injection market, This is the 2013 military stock market, the main difference between the 2015 military market will further strengthen this distinction.

In the Tri-wave market deduction process, I always use the "3231" Investment Research system to guide the study and actual combat, the actual combat proved that the system and the military sector of the industry wheel dynamic fit is very satisfactory. Military stocks have always been a layer of mysterious veil, how to study is a thorny issue, for military stocks classification, valuation methods and operating methods, I combined with nearly five years of military stocks investment and research experience, put forward the military unit of "3231" Investment Research system, the system is mainly thought is: "Three types of business classification, Two kinds of value growth path, three valuation methods, one word operation tips. The general work plate is divided into "pure military unit", "concept military unit" and "private military stock" triple type, as the basic framework of investment and Research of military unit, on this basis, classify, set up analysis logic and valuation body. Department, the growth mode is mainly embodied in the "endogenous growth" and "epitaxial growth" two models, with the market capitalization comparison method, PB, PS three methods of different types of military stocks valuation, the operation of military stocks will be refined into a sentence: "Fundamental to determine the safety margin, the market is expected to determine the rising space, the public sentiment determines the timing ”。

Second, has the military stock macro background changed?

A mention of military stocks, people's first reaction is in the surrounding tensions, military stocks will come a wave of pulse market, the past few years of military stocks to exclude the factors of asset restructuring, the surrounding situation, geopolitical factors are the important factors of military market. Military industry in addition to the reform of the hospital and the aviation engine special and other factors, the surrounding situation and the basic characteristics of geopolitics will not change in the future, so in the summary and comb the investment opportunities and risks of military stocks, military macro background is the need to periodically re-comb and study.

The defense sector, under the joint role of the security situation and national strategy, is tense or normal but not out of control, which is the best period for the development of the military industry. Military enterprises in the "moderate tension" in the context of the most conducive to development and growth. If there is a war, then the demand for weapons and equipment will be explosive growth, the relevant enterprises profit also refers to a number of soaring, this is the most direct logic, but the current international environment, the possibility of large-scale war is very small, at most, some local conflicts and confrontation, so it is not possible to expect military enterprises to send "war money". In fact, when the real large-scale war, unless like the United States in the early days of World War II, the war away from home, the United States military enterprises to accept the war dividend, otherwise, wealth and assets in the fire in the Ashes is a big probability event, the chickens are not, where the eggs? Therefore, the surrounding situation and national defense security is both tense and can not get out of control, that is, in a "moderate tension" situation, the most advantageous to the development of military enterprises.

With the increasing of comprehensive national strength and the growing economy, China has become an important force in the world multi-polarization pattern. But China's military development level and the United States, Russia, the European Union major Member States there is a large gap in the maintenance of national sovereignty, the protection of national development interests and pressure. In January 2011, the United States issued a "military strategy for the next 10 years". At the press conference, the U.S. report, entitled "Maintaining America's global Leadership: the National defense priorities of 21st century," said the United States would reduce its military presence in Europe while ensuring a "military super-strong" position, and instead strengthen its deployment of military forces in the Asia-Pacific region. Obama reiterated in the press conference that the U.S. strategic focus will shift to the Asia-Pacific region, the United States return to the Asia-Pacific strategy has become China's biggest challenge.

China's national Defense Security strategy will shift from the core of local defense to a broader regional defense and global defense, the establishment of the National Security Council is the direct result of the security strategy transformation. As a super authority, the National Security Council can undertake and resolve the political risks of reform, and use economic and military diplomacy to deal with security issues. The strategic pattern of profound adjustment, China's strong rise inevitably will have a major impact on the Asia-Pacific region and even the global strategic structure, the Asia-Pacific region has become the world economic development and great power strategic game stage, leading to China and neighboring countries, as well as between the United States need to adjust their strategies to adapt to new changes, Achieve a new balance.

With China's strong economy, the need to import resources from the world and overseas investment, but also need to develop a strong military force to safeguard China's global interests, national security is not confined to the territory. The defense white paper points out that with the gradual integration of China's economy into the world economy, overseas interests have become an important part of China's national interests, and the security of overseas energy resources, maritime strategic corridors and overseas citizens and legal persons has become a prominent issue.

Iii. How does the economic cycle affect the military industry?

Economic field, more than 30 years of economic development results for the strengthening of national defense has laid a solid financial foundation, economic restructuring is expected to bring more industrial policy support for the military industry. The country has no money, the development of military industry, the expansion of armaments is unrealistic things, after the reform and opening up, in order to focus on economic development, China's military and military thinking is "tighten the belt endure a endure", fully support economic construction, this endure, endure 20 years, now the economic development and growth, Into the new century only began to re-military development on the important agenda, is the so-called money good work.

Britain is a veteran military power, but since the Second World War, it has been constrained by the domestic economic development, the military strength has been declining, so far, both strategic and tactical forces have been greatly weakened. After the founding of Russia, compared with the former Soviet Union, the military strength of the year, especially the Navy, can only focus on maintaining part of the strategic Strike Force, until 2000, after the Putin administration, Cai Lue, the main reason behind the economic strength of the constraints. By contrast, the United States is able to dominate the world with strong military power, leading the way in military equipment and military research, and is closely linked to the strong economic backing of the United States.

The relationship between military industry and economic environment is mainly embodied in two aspects: first, national defense and military construction, especially the development of weapons and equipment need the support of state finance; second, the military industry itself is also an organic part of the national economy.

More than 30 years of economic development has laid a solid financial foundation for the development of military industry. 2013 China's GDP has reached the second level of the world, the world's second largest economy. The rapid development of national economy for more than 30 years has laid a solid financial foundation for national Defense construction.

Since the 90 's, despite the long-term double-digit growth of our national defense budget, the proportion of military expenditure has been declining steadily. In 2013, the defense budget was 720.168 billion yuan, an increase of 10.7% from a year earlier, nearly 16 times times the 1993 growth, compared with the 2001 expenditure of 144.2 billion yuan, China's military compound growth rate of 13 years.

China's military-to-GDP ratio has remained at around 2% per cent for a decade, below the world average of 2.4%, and there is ample room for compensatory growth in China's military spending, even if it takes into account the future decline of China's economic growth hub, which would not be a clear constraint on the defence budget. From the support of defense budget, China's military industry is also in a rare period of development opportunities.

Economic restructuring and upgrading is expected to bring more policy support to the military industry. As an organic part of national economy, military industry also undertakes the important mission of leading national high-tech industrial structure adjustment. 2010 The defense white Paper once made clear: "Around the national high-tech industry development focus and direction, speed up the military technology to promote transformation." Breakthrough the key technology and industrialization bottleneck, in aerospace, electronic information, special equipment, new energy and high-efficiency power, energy saving and environmental protection and other fields, the development of strategic emerging industries and military characteristics of high-tech industry, cultivate new economic growth point, promote the national industrial revitalization and the adjustment of high-tech industrial structure. "In the seven strategic emerging industries, modern aviation equipment, satellite and application industries are carried out by the military group to undertake, rail transport, marine equipment, information technology, new energy, materials and other fields also lack of military enterprises."

To sum up, military stocks in 2013 and 2014 can be made enough eyeballs, but also to focus on the military shares of the investors to share the huge dividends of the rise of the military, but, again good stocks, and then good plate, more and more will overdraft too much of the future, then reasonable callback is normal, one digest overvalued valuation, Second, waiting for the industry level of performance, policy validation, for 2015 years of military stocks, my judgment is to digest the valuation first, and then continue to the market. At the end of 2014 a variety of policies, performance expectations naturally will not be satisfactory, this is the basis for differentiation, the basis for the continuation of the market is the military environment in the defense and economic two levels of continued to good, this is not a short-term impulse stimulus elements, but a 35-year long-term fundamental background. (Source: Snowball)

"Military industry in depth report one" Military 2015: National defense and economic double drive 35 quotes