Executive Summary
The national defence industry is divided into 7 sub-industry: aerospace, aviation, warship, weapon, nuclear, electronic communication and other supporting sub-industry, which contains 117 stocks.
The Industry has undergone recent national reform, integration policies and pricing mechanism reforms. The politically imposed change of landscape to the industry provides great growth opportunities in the future.
Industry Performance
Source: Wind data-provider
Characteristics of the Defence Industry
- Political
- Research and Development
- Monopolistic
- Comparison of the Industry to Established Market Examples; U.S.A
Bullish Industry Points
- Military Reform has Improved Fundamentals
- Reform of State-Owned Enterprises (SOE)
- The Industry is Undervalued; P/E Ratio and Index
Potential Cautions for the Industry
- Slower than Expected Reform
- US Export Prohibition to High-End Technology
