Great Wall Military Industry (601606.SH) Hot Stock Driving Factors and Market Analysis

This analysis is based on the information from tushare_hot_stocks that Great Wall Military Industry (601606.SH) made it to the hot stock list [0], released on November 19, 2025. As an important enterprise in China’s military industry, Great Wall Military Industry has a return rate of 313.95% since the start of 2025 [0], with a market value of 35.26 billion yuan, and its market attention has increased significantly. Key driving factors include the recovery of the military industry’s prosperity, policy support, and major event catalysts, while attention should be paid to the recent risk of capital outflows [1].

Great Wall Military Industry’s main business covers military products (mortar shells, individual rockets, etc.) and civilian products (automotive parts, rail transit components, etc.) [0]. In 2025, the military sector ushered in a double inflection point in fundamentals and market performance [0], and the company’s stock price performed excellently, with a 1-year return rate of 277.95% and a 3-year return rate of 343.69% [0]. Key driving factors include:

1. Industry Prosperity
   : The overall demand for the military industry has risen, and policy support has been increased (such as the launch of the ‘15th Five-Year Plan’ [0]);
2. Event Catalysts
   : The first show of the domestic large aircraft C919 in the Middle East [4] has driven up the attention of the aerospace sector, with related ETFs seeing a net inflow of nearly 80 million yuan in the past 20 days [4];
3. Military Trade Volume Growth
   : Soochow Securities pointed out that the increase in military trade volume combined with the four main lines of new-quality combat capabilities will lead a new cycle in the military industry [5].

1. Performance and Valuation Divergence
   : The company’s revenue in the past 12 months was 1.54 billion yuan, but the net profit was -305 million yuan [0], indicating that the stock price rise is more driven by industry sentiment rather than fundamental improvement;
2. Impact of International Events
   : International events such as the first show of C919 in the Middle East have significantly increased the attention on the domestic military sector, reflecting the market’s expectations for the internationalization of China’s aerospace industry [4];
3. Capital Flow Characteristics
   : Recently, the main funds sold a net 662 million yuan [1], which may indicate short-term profit-taking pressure.

• Short-term capital outflow risk: Main funds sold a net 662 million yuan on November 18 [1];
• Fundamental challenges: Sustained negative net profit, profitability needs to be improved [0];

• Growth potential of military trade: Soochow Securities predicts that the increase in military trade volume will lead a new cycle [5];
• Policy dividends: Continuous support for the military industry from the ‘15th Five-Year Plan’ [0];
• International market expansion: Overseas promotion of products such as C919 may drive demand for related industrial chains [4].

The hot performance of Great Wall Military Industry is mainly driven by industry trends and events. The short-term market sentiment is high, but it is necessary to balance fundamentals (negative net profit) and short-term volatility risks. Investors should pay attention to the implementation of industry policies, military trade data, and the improvement of the company’s profitability to evaluate long-term investment value.