CSC: The defense sector's performance continues to rebound.

A research report by CITIC Securities notes that the performance of the defense and military industry sector has continued to recover since bottoming out in 2025, with demand recovery reflected in financial statements for multiple consecutive quarters. In 26H1, the sector's profit growth rate rose significantly to a new level, and the recovery is moving from structural to comprehensive. Against the backdrop of the centenary of the founding of the military in 2027, the industry's upward trend from 2025 to 2027 is highly certain, and it is currently at a critical window as the "14th Five-Year Plan" concludes and the "15th Five-Year Plan" begins. The impact of personnel adjustments among military clients in the first half of the year has been further absorbed, and delayed orders from the "14th Five-Year Plan" are being delivered at an accelerated pace. As the equipment catalog of the "15th Five-Year Plan" gradually becomes clear, large-scale order placement is approaching, and the sector has entered a new cycle of comprehensive fundamental recovery.