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Defense and military industry sees improved prospects for 2024, with key growth areas including shipbuilding, low-altitude economy, satellites, and long-range precision weapons.

The defense and military sector is expected to gain momentum in 2024 following a series of positive developments. The defense industry's performance in 2023 saw mixed results due to factors like personnel adjustments and delayed orders, but analysts now forecast a gradual upswing in the sector's output capacity. Defense manufacturing companies have started to secure new orders, suggesting recovery and improved financial health.

Key areas of opportunity:

1. Shipbuilding: The market is expected to enter a new cycle, particularly in container and oil tanker sectors. China Shipbuilding Corporation (CSIC) and related entities are positioned to benefit from strong demand for new vessel orders, driven by fleet modernization and expansion.

2. Low-altitude economy: Supported by government policy, advancing technologies, and infrastructure development, this sector is set to launch its commercial operation phase in 2024. Companies specializing in eVTOL aircraft, drones, and associated equipment are set to gain traction.

3. Aviation equipment: Fueled by the ramp-up of new military aircraft programs and operational efficiencies, this segment is expected to maintain strong revenue and profit growth in 2024.

4. Satellites: Integral to nationwide connectivity efforts and defense applications, satellite technology is poised for significant expansion in both domestic and international markets.

5. Long-range precision weapons: These systems are critical to ground force capabilities and are experiencing growing demand.

Moreover, specific recommendations highlight companies like China Shipbuilding Industries Group, AVIC firms, and others in the defense ecosystem that possess strong order books and competitive advantages.

Risks mentioned separately, and an investment outlook outlook is provided for the near term.