Analysis of the Impact of Order Growth in Military Composite Materials of North Long Dragon and Defense Budget Increase

According to the collected data, I will provide you with a detailed analysis of the impact of order growth in military composite materials of North Long Dragon and defense budget increase on civilian enterprises participating in the military industry.

(Stock Code: 301357.SZ) is a high-tech enterprise focusing on the R&D of supporting equipment for military vehicles, mainly providing non-metallic composite material solutions for main battle equipment such as armored vehicles [1]. The company’s products hold an important position in the military composite material field; in 2025, its stock price performed extremely well, with a maximum increase of 648.58%, ranking among the top five in the military industry sector [1].

1. High Technical Barriers
   : Military composite materials involve the application of high-performance materials such as carbon fiber and glass fiber, with extremely high requirements for product performance like high temperature resistance, impact resistance, and lightweight.

2. Strong Order Stability
   : Due to the particularity of military product procurement, once entering the supply system, companies usually obtain relatively stable order sources.

3. Rapid Technology Iteration
   : Modern warfare’s increasing requirements for equipment lightweight and stealth drive continuous upgrading of composite material technology.

• According to data from the Stockholm International Peace Research Institute (SIPRI), global military spending has increased for 10 consecutive years; in 2024, global military expenditure increased to $2718 billion, up 9.36% from 2023 [1].
• China’s defense budget continues to increase, providing a larger market space for military supporting enterprises.

• The state continues to promote the military-civilian integration development strategy, providing policy support for private enterprises to enter the military product supporting market.
• Civilian enterprises participating in the military industry can complement state-owned military groups with their technical advantages in certain segmented fields.

• The military’s openness to private enterprises is gradually increasing, and some non-core but high-tech component orders are beginning to transfer to private enterprises.
• The composite material field has become an important direction for civilian enterprises to participate in the military industry due to its rapid technological updates and strong innovation vitality of private enterprises.

• Military product production requires corresponding weapons and equipment R&D and production licenses, with high entry barriers.
• Strict confidentiality reviews and quality system certifications are required.

• Military product procurement usually adopts installment payment methods such as advance payment, progress payment, and acceptance payment, resulting in a long payment collection cycle.
• High requirements for the company’s cash flow management capabilities.

• National defense modernization has increasing requirements for equipment performance, so enterprises need to continuously invest in R&D.
• The rapid pace of technological upgrading and replacement brings the risk of being replaced.

• Focus on the application of non-metallic composite materials in military vehicles, with deep technical accumulation.
• Has multiple military product supporting qualifications, with first-mover advantages.

• Supplies directly or indirectly to the military, with strong customer stickiness.
• Benefits from the batch deployment of main battle equipment such as armored vehicles.

• Leading position in the segmented field, with a high market share.
• The significant stock price increase in 2025 reflects the market’s recognition of the company’s development prospects.

• Military product procurement is affected by factors such as national defense policies and equipment planning, with certain volatility.
• High concentration on a single customer or product may bring concentration risks.

• The direction of policies for civilian enterprises to participate in the military industry is uncertain.
• Changes in industry regulatory policies may affect the company’s operations.

• The company’s stock price rose significantly in 2025, and the valuation may be high.
• Need to pay attention to whether the company’s performance can support the current valuation.

1. Order Situation
   : Focus on the amount of new orders signed and the status of existing orders.
2. Performance Growth
   : Track the company’s revenue and profit growth rates to verify growth.
3. R&D Investment
   : Pay attention to the company’s R&D progress and technical breakthroughs in new material fields.
4. Policy Trends
   : Track the changes in policies for civilian enterprises to participate in the military industry and defense budget.

• Long-term Allocation
  : The military composite material industry benefits from the national defense modernization process and can be used as a long-term allocation direction.
• Layout on Dips
  : Pay attention to leading enterprises with technical advantages and order guarantees when the industry corrects.
• Diversified Investment
  : Diversify individual stock risks by investing in military-themed funds.

North Long Dragon, as a representative civilian enterprise participating in the military industry in the field of military composite materials, benefited from the growth of defense budget and the deepening of policies for civilian enterprises to participate in the military industry, achieving a significant increase in stock price in 2025. The company has obvious technical and market advantages in the field of composite material supporting for military vehicles, but investors also need to pay attention to factors such as fluctuations in military product procurement and valuation risks. The continuous growth of defense budget provides a broad development space for civilian enterprises participating in the military industry, but while seizing opportunities, enterprises also need to continuously improve their technical strength and market development capabilities to cope with industry competition and policy changes.

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[1] Securities Times Network - Asset Restructuring in the Military Industry Brings Historic Opportunities, Commercial Aerospace Opens a Trillion-yuan New Blue Ocean (https://www.stcn.com/article/detail/3558823.html)