Great Wall Military Industry (601606) Limit-Up Analysis: Driving Factors and Market Impact

Great Wall Military Industry (601606), as Anhui Great Wall Military Industry Co., Ltd. (founded in 2000, listed in 2018 [0]), its main businesses cover equipment manufacturing (69.14%) and civilian products (28.60%) [0]. On November 17, 2025, the stock hit the limit-up to 53.55 yuan with a turnover of 332 million yuan [0], and its year-to-date increase reached 355.36% [0]. The driving factors include:

1. Geopolitical situation
   : Remarks by Japanese officials regarding Taiwan stimulated the overall rise of the military sector [0][7];
2. Business growth
   : In the first half of 2025, military product revenue increased by 33.07% year-on-year, and R&D investment increased by 18.37% [0];
3. Expectations of SOE reform
   : The split and restructuring of the indirect controlling shareholder, China South Industries Group Corporation, has attracted market attention [0][3];
4. Market sentiment
   : Active financing purchases (194 million yuan of financing purchases on November 14 [2]) and heavy fund holdings (2 funds under Jiahe Fund hold positions [1]) drove the stock price.

• Sector linkage
  : The limit-up of Great Wall Military Industry synchronized with the overall rise of the military sector (Zhongfutong, Jianglong Shipbuilding, etc. hit limit-up [8]), showing the characteristics of a sector-wide market [0][9];
• Valuation and fundamentals divergence
  : Although the stock price performance is strong, the net loss in the first three quarters narrowed by 76.66% (not yet profitable), so there is a risk of fundamental bubble [0];
• Policy dividend expectations
  : Against the background of the 100th anniversary of the founding of the army in 2027, the positive trend of the military industry from 2025 to 2027 is clear, which has become a long-term supporting factor [0].

:

• Valuation bubble
  : The current market value is 38.782 billion yuan, which is inconsistent with the unprofitable fundamentals, so the short-term correction risk is high [0];
• Geopolitical volatility
  : If the situation eases, the military sector may face a cooling of sentiment [7];
• Financing position pressure
  : The financing balance is 596 million yuan [2], and if the stock price fluctuates, it may trigger liquidation risks.

:

• Long-term industry trend
  : The military industry has strong certainty in order growth and benefits from the stable increase in defense budget [0];
• SOE reform dividends
  : As an Anhui SOE and an enterprise under China South Industries Group Corporation, the reform process may bring asset integration opportunities [3][0].

: Investors need to carefully evaluate the rationality of the stock’s valuation and avoid blindly chasing high prices [0].

The limit-up of Great Wall Military Industry is the result of the combined effect of geopolitics, business growth, policy expectations, and market sentiment. The stock has performed outstandingly this year, but attention should be paid to the matching degree between fundamentals and valuation. The long-term trend of the military sector is positive, but short-term fluctuation risks cannot be ignored. Investors should combine their own risk tolerance to rationally view market opportunities and risks [0][1][7].