Company profile:

The company is a shareholding company, and its main business is carried out through subsidiaries, which is divided into two parts: military business and civilian business, mainly military business.

Anhui SASAC is the actual controller of the company and holds 100% equity of the company's controlling shareholder, military Industry Group.

Current situation and prospect of the industry

The sustained and rapid growth of China's defense expenditure has led to the rapid development of the national defense industry. In recent years, China's economy has continued to grow rapidly, and the country's economic strength and comprehensive national strength have been significantly enhanced, creating favorable conditions for the increase of investment and stable development of the national defense industry. With the sustained growth of China's economy in the future, China's national defense expenditure will continue to grow rapidly with the growth of economic scale and fiscal revenue.

Defense expenditure accounts for a relatively low proportion of GDP, and there is more room for growth. According to China's national defense white paper and data released by the National people's Congress, China's Ministry of Foreign Affairs and the National Bureau of Statistics, China's defense expenditure as a proportion of GDP is basically stable at about 1.3%, far lower than the data released by the Swedish Stockholm International Peace Research Institute (hereinafter referred to as "SIPRI") of other major military powers in the world. With the enhancement of comprehensive national strength and the need to protect the expanding national interests, the proportion of China's national defense expenditure in GDP will gradually increase and move closer to the major military powers in the world.

Highlights of the company:

The position of the industry is prominent. The company's four military subsidiaries, Shenjian Technology, Fangyuan Mechatronics, Dongfeng Mechatronics and Hongxing Mechatronics, are all key military enterprises and occupy an important position in their corresponding fields.

The product layout is reasonable. The company's existing or under research products have fully covered all services and arms of the sea, land, air and rocket armies, and have gradually realized the leap from traditional ammunition to efficient destruction, long-range suppression and precision strike ammunition, and from a single ammunition system to a weapons system. Army ammunition equipment to sea, air and rocket army arms and ammunition equipment.

In line with the development trend of the industry. The company constantly analyzes the market demand, studies and judges the development trend of weapons and equipment, uses the achievements of new basic research and applied technology, and combines the company's actual experience to carry out advance technology development and pre-research of weapons and equipment. its products conform to the trend and trend of the development of the world war and accord with the development direction of our army in the field of ammunition, such as "mobile penetration, long-range suppression, precision strike, efficient destruction".

Fund-raising project

1. It is proposed to raise 152 million yuan to build the production capacity of mortar shells and optoelectronic countermeasure ammunition series products.

two。 It is proposed to raise 129 million yuan for the production capacity construction project of portable individual rocket series products.

3. It is proposed to raise 100 million yuan to build the production capacity of fuze and submunitions series products.

4. It is proposed to raise 75 million yuan for the technical upgrading and capacity expansion project of high-strength Anchorage system.

Main potential risks

The risk of investors' judgment on the value of the company is affected by the disclosure of confidential information and exemption from disclosure. The company is mainly engaged in military business, and some of the production, sales and technical information are state secrets and should not be disclosed or directly disclosed. Due to the exemption of disclosure or decryption of confidential information, it may affect investors' judgment of the value of the company, resulting in mistakes in their investment decisions.

The risk of leaking state secrets. Great Wall military Industry and its four military subsidiaries are all second-class secret qualification units, which attach great importance to security and secrecy in production and operation, and have formulated and implemented various strict and effective secrecy systems and measures to protect state secrets. however, the occurrence of some extremely unexpected circumstances may lead to the leakage of relevant state secrets, which will adversely affect the production and operation of the company.

Valuation

The company works in other manufacturing industries, and as of July 20, 2018, China Securities Index Co., Ltd. released an average monthly static price-to-earnings ratio of 23.75 times. The issue price of 3.33 yuan per share corresponds to a diluted price-to-earnings ratio of 22.93 times for 2017. Combined with the current market conditions, the initial pressure position is expected to be 15-18 yuan.