Recently, the performance of military industry stocks has completely exploded. One company's net profit in the third quarter soared 28 times, and the growth rate of three other companies exceeded 200%. Many people asked on their mobile phones, "Which of these four companies can I buy with my eyes closed?" On October 15, the Shenwan National Defense and Military Industry Index rose by more than 3% in a single day, and these four leading companies led the sector. This article combines the preview of the third quarterly report of 2025 and the latest order data to clearly explain the surge logic and opportunity points of each company, so that novices can directly make their selections.

Let me give you some reassurance first: this surge in performance is not false. The national defense expenditure for 2025 is 1.81 trillion yuan, a year-on-year increase of 7.2%, with more than 35% invested in the field of "new quality combat capabilities." The "Guiding Opinions on Accelerating the Upgrading of Military Equipment" issued on September 18 also made it clear that intelligent and unmanned equipment must be tackled, and special funds are particularly heavily tilted. More importantly, this year is the final year of the "14th Five-Year Plan". Early orders have been delivered intensively. The average order schedule of enterprises has reached 2.5 years. The proportion of advance payment has also increased to more than 30%. If the goods are not ready, the money will be collected first, and the performance will naturally be supported.

1. Dismantling of the 4 rapidly growing faucets: Who is the real gold and who is the epiphyllum?

Although these four companies are all experiencing skyrocketing growth, their core logics are very different, and their opportunities and risks are hidden differently:

1. Military navigation chip leader (undisclosed name): 28-fold increase, the most hard-core technology monopoly

It is the "growth king" of this wave. In the third quarter of 2025, its net profit surged by 28,123% year-on-year, from 320,000 yuan in the same period last year to 87 million yuan. This achievement is all due to its "exclusive business" - it is the only company in the world capable of producing a certain type of military intelligent navigation chip. Its anti-interference ability and positioning accuracy are superior to foreign products, and its market share directly exceeds 80%.

In 2024, we were still worried about insufficient production capacity. As soon as the new production line was put into operation in 2025, we received orders worth 1.5 billion yuan in a single quarter. Contract liabilities soared from 50 million yuan at the beginning of the year to 230 million yuan, and orders have been scheduled until 2027. What’s even more surprising is that the cost of raw materials has dropped by 18%, the products can still maintain their original prices, and the gross profit margin has been fully increased.

Opportunity point: There is no rival in the technology monopoly, and the order visibility will be until 2027, so it is suitable for long-term acquisition; Risk point: High dependence on a single product, and subsequent replacement technologies will be affected.

2. Northern Rare Earth (): 279% growth, just-in-demand materials can make a steady profit without losing money

As a leader in rare earths, its high-purity rare earth oxides are the core ingredients of missile guidance systems. The proportion of military orders in 2025 will increase from 25% to 40%. The net profit in the third quarter was 1.54 billion yuan, a year-on-year increase of 279.94%. It was purely a matter of "making money": on the one hand, the growth in the defense budget brought stable orders, scheduled to 2027; on the other hand, the price of rare earth raw materials fell by 18%, and the cost fell but the selling price did not fall. The gross profit margin rose from 28% to 35%.

Its advantage lies in "rigid demand". As long as the equipment is upgraded, the demand for rare earths will not be reduced, and it can also rely on the civilian rare earth business to support it, and its performance fluctuations are particularly small.

Opportunity point: It is dual-use and anti-risk, and there are additional benefits when the price of materials increases; Risk point: Rare earth prices are greatly affected by policies, and if the price falls back, profits will be compressed.

3. Guangqi Technology (): 198% increase, hidden champion in the metamaterial track

This company specializes in military metamaterials. Its products can make equipment invisible. On October 12, it just signed two metamaterial orders totaling 516 million yuan. The cumulative orders in the first three quarters were nearly 2.6 billion yuan, setting a new annual record. Net profit in the third quarter increased by 198% year-on-year. The core is that production capacity has kept up with demand. In the second half of the year, new production capacity bases were put into production one after another, just in time to catch the wave of orders for equipment upgrades.

Metamaterials are a key technology for "new quality combat effectiveness", and the company's customers are all core OEMs. Once they enter the supply chain, they are difficult to replace and order stability is extremely strong.

Opportunity point: The demand for metamaterials has just exploded, and new production capacity continues to be released; Risk point: R&D investment is high, and if new technology iteration is slow, it may be overtaken.

4. Aviation Engine (): 126% growth, “heart” supplier as stable as Mount Tai

It is the "only seedling" of domestic military engines, and the mass production of the turbofan-15 engine has directly caused its performance to soar. In March 2025, the WS-15 was officially announced for mass production. Shenyang Liming's pulsating production line was advancing at a speed of assembling one unit in 72 hours. The first batch of deliveries was completed in June, completely solving the "heart disease" problem of domestically produced fighters.

Net profit increased by 126% in the third quarter. On the one hand, it doubled the delivery volume of turbofan-15. On the other hand, the civil aerospace engine business is also developing, and it has opened up new space after entering the C919 supply chain. As the only full-spectrum military aviation company in China, it has a market share of over 90% and has no rivals.

Opportunity points: Engines are a critical need among rigid needs, and the military and civilian markets are opening up; Risk points: If quality problems occur during mass production, the delivery pace will be affected.

2. Horizontal comparison of 4 companies: choose different stocks for different needs

If you want to make a layout, you have to look at your own style. These four suitable investors are completely different:

The core advantages of the target are suitable for the crowd to hold positions.

Military navigation chip leading technology monopoly, long-term order cycle, long-term investors can take 15% of the position in 1-2 years, and cover the position if it falls by 10%

Northern Rare Earth has both military and civilian uses and stable performance. Stable investors are afraid of fluctuations of 20%, so they make bottom position allocations.

Kuang-Chi technology track is scarce and flexible. Enterprising investors dare to chase 10% of growth positions and keep an eye on production capacity release news.

Aircraft Power just needs a monopoly, and growth determines the balance of investors. Seeking stability and increasing the position by 15%, look at the delivery data

3. Three key points you must look at in the layout: Don’t step into the wrong rhythm

No matter which company you choose, you must abide by these three principles, otherwise your work will be in vain:

1. Keep an eye on contract liabilities and advances: The performance of military industry stocks depends on orders, and contract liabilities are the "reservoir of future profits." For example, the contract liabilities of the leading navigation chip company have increased by 360%, and northern rare earth orders have been scheduled until 2027. This is only reliable; those whose contract liabilities have declined, do not touch them if they increase again.

2. Give priority to those with “main business focus”: The military industry has high qualification barriers, and the more focused the main business is, the more advantages it will have. Kuang-Chi Technology's metamaterial business accounts for over 80%, and its aerospace power and military industry business accounts for 95%. They are both driven by its main business. On the other hand, those follow-up stocks that account for less than 10% of their military industry business are purely hot spots, so don't touch them.

3. Decentralized configuration, not single hanging: The military industry is greatly affected by the news, so it is best to configure across types. For example, "Northern Rare Earth (Stable) Guangqi Technology (Bomb)", or "Aviation Power (Long) Navigation Chip Leader (Medium)" can not only reap the profits of the bottom position, but also gain flexibility. Don't be fooled.

Lao Zhou in the community made the right choice. In the first half of the year, he bought 20% of the position in Northern Rare Earth as the bottom position, and allocated 10% of the position to Kuang-Chi Technology. Now one is guaranteed to earn dividends, and the other has risen by 25%. The more he speculates, the more confident he becomes. In fact, military industry stocks are no longer in the era of "speculating on news". Now they are looking at "order fulfillment technical barriers". Choosing the right target is 10 times better than blindly following the trend.

Finally, I would like to ask: Do you prefer the "rigorous monopoly type" like Aircraft Power, or the "high growth type" like Kuang-Chi Technology? How long do you think the steady growth of northern rare earths can last? Do you have any military industry stocks in your hands? Say it in the comment area and let me help you analyze whether it is in line with the logic of sudden performance growth! If you find it useful, please quickly forward it to your stock trading friends, don’t let them miss this opportunity~