Evaluation of the Impact of China's Rainbow-7 UAV Technology Breakthrough on the Investment Value of A-share Military Sector

The Rainbow-7 stealth UAV successfully made its maiden flight at an airport in northwest China on December 15, 2025, which is a major technological breakthrough of the 11th Research Institute of China Aerospace Science and Technology Corporation [1]. The aircraft adopts an advanced large aspect ratio flying wing aerodynamic layout with a wingspan of 27.3 meters, maximum take-off weight of 8 tons, ceiling of 16,000 meters, and maximum range of 11,000 kilometers [1]. Known as the “stand-in” for the H-20, its technical level reaches the international advanced level.

As the direct manufacturer of the Rainbow series UAVs, Aerospace Rainbow’s stock shows significant event-driven characteristics [0]:

• The increase on the day of Rainbow-7’s maiden flight reached 4.96%, far exceeding the market average
• Cumulative increase of 11.55% in the past 30 days, leading the military sector
• Current stock price is 24.63 yuan, with a 90-day increase of 15.09% [0]
• Trading volume surged: the turnover on the maiden flight day was 2.28 times the average level, indicating high market attention

The stock price is currently in a technically strong area:

• Above MA5 (23.40 yuan), MA10 (22.88 yuan), and MA20 (22.53 yuan)
• Short-term trend is upward, with obvious bullish排列特征 [0]

By comparing the performance of core stocks in the military sector before and after the Rainbow-7 maiden flight, the following characteristics are found:

• Improved performance after the event:
  Aerospace Rainbow (+0.02%), AVIC Xifei (+2.38%), AECC Aviation Power (+0.42%)
• Correction after the event:
  China Satellite (-23.24%), Aerospace Electronics (-21.21%), Advanced Technology & Materials (-10.07%)

• Average increase before the event: 9.55%, average increase after the event: 0.93%
• Event impact degree: -8.62%, indicating that the market’s short-term expectations for the military sector tend to be rational
• The overall increase of 17.13% is still at a high level, showing strong fundamental support for the military sector

Rainbow-7 has multiple technical advantages:

• Stealth Performance:
  Flying wing layout design, high integration of wing and body, with excellent aerodynamic and stealth performance [1]
• Combat Capability:
  Can carry multiple high-performance mission loads such as visible light and infrared to meet combat needs under complex conditions
• Strategic Value:
  As the “stand-in” for the H-20, it has important application value in strategic reconnaissance, precision strike and other fields

• AECC Aviation Power (600893.SS): Growth in demand for aero engines
• Advanced Technology & Materials (300034.SZ): Increased demand for superalloys and other special materials
• Aerospace Electronics (600879.SS): Increased demand for avionics systems and communication equipment

• AVIC Xifei (000768.SZ): Synergistic effect of aviation manufacturing technology
• Aerospace Rainbow (002389.SZ): Directly undertakes production orders

• China Satellite (600118.SS): Demand for system integration such as satellite navigation and data links

• The current P/E ratio of Aerospace Rainbow is 274.70 times, and the high valuation reflects the market’s high expectations for its future growth [0]
• The overall valuation level of the military sector is at a historical medium-high level, but it is still reasonable compared with long-term growth

• Valuation Risk:
  Current valuation level is high, with correction pressure
• Policy Risk:
  Changes in national defense budget, adjustments to military procurement policies
• Technical Risk:
  Uncertainties in subsequent testing and mass production progress

1. Focus on Leading Targets:
   As a direct beneficiary, Aerospace Rainbow still has trading opportunities in the short term
2. Band Operation:
   Use event-driven volatility for band operation
3. Position Control:
   Given the high valuation level, it is recommended to control the position within 5-10%

1. Industrial Chain Layout:
   Focus on configuring leading enterprises in key links of the industrial chain
2. Technical Route:
   Pay attention to the industrialization process of stealth technology and UAV-related technologies
3. Policy Tracking:
   Closely follow macro factors such as military policies and national defense budgets

1. Diversified Investment:
   Avoid excessive concentration on a single target
2. Profit Taking and Stop Loss:
   Set reasonable profit taking and stop loss points
3. Fundamental Tracking:
   Continuously pay attention to changes in company performance, order status and other fundamentals

The successful maiden flight of the Rainbow-7 UAV has had a positive but differentiated impact on the A-share military sector. As a direct beneficiary, Aerospace Rainbow’s stock price has significantly outperformed the sector average, showing high market recognition. However, the overall performance of the military sector tends to be rational, and investors need to pay attention to factors such as the process of technology industrialization, policy support and the rationality of valuation.

It is recommended that investors take Aerospace Rainbow as the core, appropriately allocate related enterprises in the industrial chain, and maintain a cautious risk control strategy while seizing investment opportunities brought by technological breakthroughs.

[0] Gilin Data API - Stock price, financial data, technical indicator analysis
[1] Phoenix News - “Pictures: Sci-fi appearance! Rainbow-7 stealth UAV successfully makes maiden flight” (https://news.ifeng.com/c/8p6PqTgp0LV)
[2] Zhihu - “H-20 has not been released yet, Rainbow UAV successfully makes maiden flight, ‘unmanned’ replacing ‘manned’ has become the mainstream” (https://zhuanlan.zhihu.com/p/1984233064797327622)
[3] Sina Finance - “Aerospace ETF (159227) rises over 1.1%, SpaceX confirms 2026 IPO plan” (https://finance.sina.com.cn/jjxw/2025-12-15/doc-inhavwnp2166977.shtml)