Orient Securities' latest weekly report on the defense and military industry states that recent adjustments in the commercial aerospace sector do not change the medium- to long-term industry trend. The international certification process for the C919 airliner is accelerating, and the defense sector is experiencing a resonance of domestic and external demand, highlighting its investment value.
The C919 has received flight test recognition from EASA, accelerating its globalization process once more. On January 15, it was reported that personnel from the European Union Aviation Safety Agency (EASA) had commenced flight test evaluation work on the C919 passenger aircraft in Shanghai. Feedback indicated that, aside from some initial issues requiring minor adjustments, the C919's performance is excellent and its safety is reliable.
As a highly regarded global aviation safety regulator, certification from EASA is a critical passport for the C919 to enter the European and international markets. Previously, the C919 had already completed passenger transport for millions of people domestically, achieving initial verification for marketization. The progress of this flight test evaluation will help the C919 accelerate its entry into the international market and promote the global layout of COMAC.
Breakthroughs in commercial aerospace technology are accelerating, presenting development opportunities across the entire industry chain. On January 15, the China Aerospace Science and Technology Corporation (CASC) held its 2026 annual work conference in Beijing. The meeting emphasized deepening major projects such as manned lunar landings and deep space exploration, making every effort to achieve breakthroughs in reusable rocket technology, and accelerating the construction of a leading aerospace nation.
Recently, the commercial aerospace field has reported successive technological breakthroughs. The Long March 12B completed a static fire test at the Dongfeng Commercial Aerospace Innovation Test Zone, while the Lihong-1 Yao-1 vehicle successfully completed a suborbital flight test and payload module recovery.
As competition for low-Earth orbit resources intensifies, low-orbit satellite constellations have become a new arena for major powers' space rivalry. China is accelerating the large-scale and systematic construction of its own low-orbit constellations. Driven by both policy support and breakthroughs in reusable rocket technology, the entire industry chain—including satellite manufacturing, launch, and operation—is entering a fast lane of development, with more application scenarios expected to materialize.
The defense sector's investment value is prominent, with targets in multiple areas attracting attention. Orient Securities stated that the "16th Five-Year Plan" period has begun, and the next phase of equipment construction planning is about to be clarified. With domestic and external demand resonating in the defense sector, its allocation value is prominent.
In the short term, attention can be paid to new quality productive forces related to unmanned and counter-unmanned equipment, deep-sea technology, and combat informatization following the implementation of the "16th Five-Year Plan." From a medium- to long-term perspective, defense enterprises have broad development space in civilian aero-engine and gas turbine businesses and commercial aerospace. The accelerated global expansion of Chinese high-end equipment will also promote the growth of the international defense trade market, with civilian and military trade potentially becoming a second growth engine for the sector.
Orient Securities also provided relevant investment targets covering multiple areas, including commercial aerospace, aero-engine & gas turbine chains, new domains of quality, defense electronics, and military trade/host equipment. Targets in the commercial aerospace area include Aerospace Electronics, Guobo Electronics, and Haige Communications; the aero-engine & gas turbine chain area includes Western Superconducting and AVIC Heavy Machinery.
Risk Warning. It is important to note that the development of the defense sector still faces two major risks. First, orders for military products and revenue recognition may fall short of expectations; military projects carry inherent uncertainty due to the complexity of R&D and technical processes. Second, R&D progress and industrialization may lag expectations, as transitioning new technologies from the laboratory to industrial production requires overcoming challenges related to production, market acceptance, and cost.
Comments