Military Trade Concept Surges; China Communications Construction and Great Wall Military Industry Hit Daily Limit

Military trade concept surged strongly during the trading session on the 24th. As of the time of writing, China State Construction Industrial and Great Wall Military Industry hit the daily limit, Huaxiang Technology and Inner Mongolia First Machinery Group rose about 9%, and China Unmanned Aerial Vehicles increased over 4%.

Institutions say that the ongoing global turmoil and potential conflict risks objectively create a significant “substitute demand” window for the global military trade market, providing strategic opportunities for China’s military exports. The rapidly worsening regional security situation is forcing some countries to increase military trade procurement, and global defense demand is expected to enter a burst period.

CITIC Securities recently stated that amid unprecedented changes in the world, the confrontation between global camps is intensifying, and the trend of expanding military preparedness is emerging or apparent. Countries’ demand for various advanced weapons is becoming more urgent. After years of development, China’s equipment has shifted from importing and copying weapons to independent research and development. Overall, the export indicators of major military trade products, including aerospace equipment, have shown varying degrees of improvement. On one hand, recent global regional conflicts have highlighted the high efficiency and cost-effectiveness of equipment such as drones and missiles; on the other hand, various export aircraft (including drones) and missile models showcased at the Zhuhai Airshow and other defense exhibitions have attracted widespread attention. Coupled with rapid technological development in China’s aerospace equipment, the advantage of “cost-effective and high-quality” military trade exports has been further consolidated. In the short term, orders for equipment with export experience or already deployed domestically are expected to be prioritized, especially drones and guided munitions; in the long term, China and friendly countries are expected to increase technical exchanges in defense and military industries.