The 15th China Airshow Grand Opening: J-35A Makes Its Debut, New Opportunities Await the Military Industry Sector

The 15th China Airshow Grand Opening: J-35A Makes Its Debut, New Opportunities Await the Military Industry SectorThe 15th China International Aviation & Aerospace Exhibition (Airshow China) officially opened today in Zhuhai, Guangdong. With 1,022 companies participating from 47 countries and regions, the event saw a 104% increase in overseas exhibitors compared to the previous Airshow

The 15th China Airshow Grand Opening: J-35A Makes Its Debut, New Opportunities Await the Military Industry Sector

The 15th China International Aviation & Aerospace Exhibition (Airshow China) officially opened today in Zhuhai, Guangdong. With 1,022 companies participating from 47 countries and regions, the event saw a 104% increase in overseas exhibitors compared to the previous Airshow. The event will showcase a variety of aviation and aerospace equipment, among which the most eye-catching is the debut of the J-35A, a medium-sized stealth multirole fighter jet.

The public debut of the J-35A signifies that the Chinese Air Force will concurrently possess two stealth fighter jets, making it the second country globally to achieve this. This not only marks a significant breakthrough in China's aviation industry technology but also provides robust support for enhancing the combat capability of the Chinese Air Force.

Besides the J-35A, the Airshow will also showcase a number of other new aviation and aerospace equipment, including the J-15T, a heavy-duty carrier-based fighter jet for the navy; the Rainbow-9, a medium-high altitude long-endurance unmanned aerial vehicle; the Red-19 surface-to-air missile system; the Chang'e-6 probe; the Long March 8A carrier rocket; the Long March 12 series carrier rocket; the Haolong cargo spaceplane; and the YF-209 liquid oxygen methane engine.

Worth noting is that multiple commercial aerospace products will also be showcased at the Airshow, such as the XPeng Aero "Land Battleship" flying car and various eVTOL aircraft from Zero Gravity. The display of these products indicates that the commercial aerospace sector is on the verge of new development opportunities.

Institutions are Optimistic About Investment Opportunities in the Military Industry Sector Brought by the Airshow

Zheshang Securities believes that the Airshow will feature a large number of new equipment, making it a highly anticipated event. The institution also acknowledges the planned nature of the defense military industry. The current index has corrected to its "14th Five-Year Plan" initial level, and some disruptive factors have gradually been eliminated, indicating potential improvements in the industry fundamentals. The defense military industry may witness a turnaround in the fourth quarter, leading to a revaluation of its worth.

China Aviation Securities also states that the disclosure of multiple new models of military aviation, aerospace defense equipment at the Airshow will further strengthen market expectations of a marginal improvement in downstream demand orders for the military industry. Additionally, the exhibition of new products such as commercial rockets, eVTOLs, and various new-quality equipment in areas of systemization, informatization, intelligence, and unmanned operations will heighten market interest in the "large military industry" sector and new domain new-quality subdivisions.

A-Share Aviation and Aerospace Equipment Industry Attracts High Institutional Attention

According to Securities Times DataBao statistics, among the A-share SW aviation and aerospace equipment sector, 25 stocks have garnered high institutional attention (rated by 3 or more institutions) and achieved profitability in the first three quarters. Guangwei Composites, AVIC Shenyang, AVIC Xi'an, and Huajin Technology stand out with the highest institutional attention, receiving ratings from 23, 20, 16, and 15 institutions respectively.

Guangwei Composites, a leading domestic provider of carbon fiber, primarily focuses on products widely used in the aviation and aerospace industries. Guolian Securities believes that the aviation sector holds vast blue ocean potential, progressively contributing to performance growth. The domestic large aircraft is entering a stage of rapid expansion, making domestic carbon fiber substitution an inevitable trend.

AVIC Shenyang's core products include aeronautical defense equipment. Notably, the J-35A, making its public debut at the Airshow, is jointly researched and produced by the Shenyang Aircraft Design Institute and Shenyang Aircraft Corporation, both subsidiaries of Aviation Industry Corporation of China. Shenyang Aircraft Corporation is a wholly owned subsidiary of AVIC Shenyang.

Based on consistent forecasts from 3 or more institutions, Weihai Guangtai and Hongdu Aviation are projected to see their net profits double in 2024, with year-on-year increases of 147.4% and 134.86% respectively. Zhongzhi Corporation, Huajin Technology, and Hangya Technology are also expected to achieve net profit growth exceeding 40%, with respective increases of 63.94%, 49.71%, and 41.88%.

Weihai Guangtai previously stated that the company's airport and emergency rescue equipment can provide service and support for the C919 aircraft. Hongdu Aviation's core business centers on aircraft product manufacturing (trainer aircraft and defense products). The company's L15 advanced trainer, a twin-engine supersonic advanced trainer, was previously showcased at the Dubai Airshow.

Conclusion

The opening of the 15th China Airshow signifies that China's aviation and aerospace industry is embarking on a new development phase. The debut of the J-35A, the exhibition of numerous new equipment, and the investment opportunities in the military industry sector will be highlights of this Airshow. Looking ahead, China's aviation and aerospace industry is poised to continue its rapid development, making even greater contributions to national economic growth and defense construction.