Hot Stock Analysis Report of Aerospace Electronics (600879.SH)

[1][2][3][4][5]. On January 22, 2026, Aerospace Electronics made it to the hot list due to the overall fluctuation of its affiliated aerospace sector, leading to a significant rise in market attention. The stock’s intraday increase once exceeded 5.87% on that day, and it finally closed up 6.2%, leading the gains of the entire aerospace sector[3]. Meanwhile, the 2026 Annual Daily Operating Related Transactions Announcement released by the company on January 20 also became an important catalyst for the stock price rally. The expected related transaction amount will increase from approximately RMB 9.29 billion in 2025 to no more than RMB 10.72 billion in 2026, representing a year-on-year increase of about 15.4%[4][5].

Aerospace Electronics (Aerospace Times Electronic Technology Co., Ltd.) is a listed company under China Aerospace Science and Technology Corporation, with its main business covering the R&D, production and sales of aerospace electronic information and unmanned system equipment. The company’s total market value is approximately RMB 86.8 billion (as of January 20, 2026), making it one of the important heavyweight stocks in the aerospace equipment sector of the A-share market[1][2]. It is worth noting that the company issued two risk warning announcements from November 27, 2025 to January 6, 2026 due to a cumulative stock price increase of 123.23%, clearly stating that there have been no major changes in the company’s fundamentals, and that there is overheated market sentiment and irrational speculation[9][10].

On the morning of January 22, 2026, the aerospace sector saw a straight-up rally. As of 09:40, the CSI Aerospace Industry Index (CN5082) rose strongly by 2.27%, and Aerospace Electronics, as a heavyweight stock in the sector, performed particularly prominently[3]. On the same day, the Wanjia Aerospace ETF (159208) rose over 2% intraday, and peer stocks such as Triangle Defense (up 13.07%) and Hangyu Technology (up 5.14%) rose in a linked manner, forming an obvious sector effect. The overall rebound of the commercial aerospace sector provided a favorable market environment for the rally of Aerospace Electronics, and the collective strength of individual stocks in the same sector further amplified the market attention of this stock.

The deep-seated background of the sector’s fluctuation is closely related to the continuous advancement of national aerospace policies in recent times. As a national strategic emerging industry, commercial aerospace has received high-level policy support in recent years. With the accelerated implementation of commercial aerospace projects such as satellite internet and carrier rocket launches, market expectations for listed companies in the aerospace equipment industry chain continue to rise. As a core electronic equipment supplier within the China Aerospace Science and Technology Corporation system, Aerospace Electronics benefits from the high boom expectations of the entire industry.

The company’s board of directors held on January 20, 2026 reviewed and approved the “Proposal on the Company’s 2026 Annual Daily Operating Related Transactions”. The total amount of expected daily operating related transactions in 2026 will not exceed RMB 10.72 billion, representing a year-on-year increase of about 15.4% compared to the actual amount of approximately RMB 9.29 billion in 2025[4][5]. These related transactions mainly include businesses such as selling goods to units affiliated to China Aerospace Science and Technology Corporation, purchasing raw materials, fuel and power, providing or accepting services, and leasing or renting houses and machinery and equipment.

The steady growth in the amount of related transactions reflects the continuous and stable business relationship between the company and its actual controller, China Aerospace Science and Technology Corporation. For listed companies with central enterprise backgrounds like Aerospace Electronics, the growth of related transactions often means that the company receives increased internal orders and resource support from the group, resulting in relatively high business certainty. The proposal has been reviewed and approved by the board of directors, and it still needs to be submitted to the general meeting of shareholders for review, and related shareholders will abstain from voting[4][6]. The review result of the general meeting of shareholders will be an important time node to verify the certainty of the company’s business growth in 2026.

According to the company’s 2025 Q3 report data, the operating revenue in the first three quarters was RMB 8.835 billion, a year-on-year decrease of 4.32%; however, the single-quarter revenue in Q3 reached RMB 3.014 billion, a significant year-on-year increase of 97.97%[2]. The explosive growth of Q3 performance has become an important fundamental support for the recent strong stock price. The nearly doubled revenue growth in Q3 not only reflects the seasonal characteristics of the company’s business, but also indicates the possibility of concentrated delivery of new orders or key projects in that quarter.

However, it is necessary to objectively view the sustainability of this performance growth. The overall operating revenue in the first three quarters still decreased by about 4.32% year-on-year, indicating that the foundation for full-year performance growth is not yet solid. The high growth in Q3 may be affected by seasonal factors (such as projects in the aerospace field usually being accepted and delivered in the second half of the year) or one-time factors (such as the delivery of large orders). Investors need to closely monitor the company’s upcoming 2025 annual performance forecast to determine whether Q4 performance can continue the strong performance of Q3.

From the perspective of institutional ratings, a total of 10 institutions have given ratings to Aerospace Electronics in the last 90 days, of which 9 gave a “Buy” rating and 1 gave an “Overweight” rating, showing a relatively positive overall institutional attitude[2]. However, the average target price given by institutions is only RMB 15.48, which represents a premium of about 85% compared to the current stock price of RMB 28.6[2]. This huge gap between the stock price and the target price reflects a significant divergence between institutions’ long-term value judgments of the company and the current market transaction price, which also indirectly confirms the “overheated market sentiment” risk prompted by the company.

On January 22, 2026, the turnover of Aerospace Electronics reached RMB 18.93 billion, with a turnover rate of as high as 20.11% and a trading volume of approximately 6.6338 million lots[1][2]. This trading level falls into the category of extremely active in the A-share market, reflecting extremely high market participation and fierce capital games. It is worth noting that just two trading days earlier, on January 20 (Monday), the company’s turnover was RMB 12.08 billion with a turnover rate of 14.32%[7]. The turnover increased by about 57% and the turnover rate rose by more than 5 percentage points in just two trading days, indicating that off-exchange capital is pouring in rapidly.

A high turnover rate is a double-edged sword. On the one hand, it indicates extremely high market attention to the stock and abundant liquidity; on the other hand, when the turnover rate rises abnormally, it often means that chips are being quickly transferred, and new entrants are taking over the previous profit-making chips at higher prices. From historical experience, this volume pattern usually appears during the process of phasing out the peak stock price.

According to the capital flow data on January 22, the main force capital had a net outflow of RMB 65.9395 million, accounting for about 0.35% of the total turnover; hot money had a net outflow of RMB 227 million, accounting for about 1.2% of the total turnover; while retail capital had a net inflow of RMB 293 million, accounting for about 1.55% of the total turnover[1][2][8]. This capital flow structure reveals a typical pattern of “main force selling, retail investors taking over”.

The continuous net outflow of main force capital and hot money indicates that institutional investors or large-capital investors are choosing to take profits, while retail investors are chasing the rally to enter the market. This capital game structure is of important reference significance for the evolution of the future market. When the foresighted main force capital begins to withdraw, and the afterthought retail capital becomes the takeover party, the stock price often faces adjustment pressure. Investors need to be particularly vigilant against this “pass the parcel” type of trading risk, as clearly pointed out by the company in its risk warning announcement.

There is a premium of nearly 85% between the current stock price of Aerospace Electronics of RMB 28.6 and the institutional target price of RMB 15.48, and this valuation level has significantly deviated from the professional institutions’ judgment of its reasonable value[2]. From a fundamental perspective, the company’s net profit attributable to parent shareholders in the first three quarters of 2025 was only RMB 209 million[10]. Calculated based on the current market value of RMB 86.8 billion, the P/E ratio valuation is already at a relatively high level. From November 27, 2025 to January 6, 2026, the company’s closing price increased by a cumulative 123.23%, while the Shenwan Military Industry Sector rose by 25.71% and the Shanghai Composite Index rose by 5.38% during the same period[9], with its increase far exceeding the overall industry and market average levels.

High valuation itself is not a fatal problem, but if it lacks strong fundamental support, it means that the stock price faces a greater risk of correction. The current rally of Aerospace Electronics is more a result of sentiment-driven and capital game, rather than a true reflection of the company’s intrinsic value.

The management of Aerospace Electronics has issued two risk warning announcements recently, clearly informing investors to pay attention to trading risks. The announcement on January 6 pointed out that the company’s stock “has an obvious ‘pass the parcel’ effect, and there is a risk of a sharp short-term decline”[9]; the announcement on January 9 showed that the cumulative deviation value of the company’s stock reached 20% in three consecutive trading days[10]. This practice of management proactively warning of risks is not common in the A-share market, and is usually only adopted when the company believes that the stock price has seriously deviated from fundamentals.

The company’s risk warnings are not groundless. As the management of a listed company, its judgment on the company’s own value and the rationality of the stock price is inevitably more accurate than that of ordinary investors. Investors should take the company’s risk warnings seriously, rather than treating them as “routine” announcements.

Although the company’s Q3 single-quarter revenue increased by 97.97% year-on-year, the overall revenue in the first three quarters still decreased by 4.32% year-on-year[2]. Although this “low front, high back” performance structure may conform to the seasonal characteristics of the aerospace industry, it also triggers market concerns about the sustainability of performance growth. If the high growth in Q3 is mainly driven by seasonal factors or one-time large orders, rather than the result of endogenous business growth, the company’s performance may face downward pressure after these short-term factors fade.

In addition, although related transactions can provide stable business sources, they also have certain limitations. A high proportion of related transactions may mean that the company’s ability to develop external markets is limited, which may affect the expansion of its market-oriented business and the improvement of its profitability in the long run.

From a technical analysis perspective, the key price levels currently faced by Aerospace Electronics include: short-term resistance level in the RMB 29-30 range (previous high, may face pressure from unwinding selling), short-term support level in the RMB 26-27 range (lower edge of the recent consolidation platform), and strong support level in the RMB 24-25 range (upper edge of the previous consolidation platform). Considering the huge short-term increase of this stock, the locked-up chips above are relatively limited, but the pressure of profit-taking cannot be ignored.

Investors need to closely monitor changes in trading volume. If the trading volume continues to expand but the stock price increase narrows during the rally, it may form a top signal of “volume-price divergence”; if the trading volume shrinks significantly when the stock price pulls back, it may mean that the selling pressure is reduced and the pullback range is limited.

Events that need attention in the near future include: the review result of the general meeting of shareholders on the related transactions proposal (if passed, it will provide positive support for the business), the release of the 2025 annual performance forecast (to judge whether Q4 performance can continue the strong performance of Q3), and the continuous changes in the flow of main force capital (to judge whether the rally can continue). These events will provide investors with important reference basis to verify the company’s fundamentals and judge the future market.

The recent hot trend of Aerospace Electronics is the result of the combined effect of multiple factors. The overall rebound of the commercial aerospace sector provides a market atmosphere, the expected 15.4% growth in related transactions in 2026 provides business certainty support, and the 98% year-on-year increase in Q3 single-quarter revenue provides a fundamental highlight. However, from the perspective of capital flow, main force capital and hot money are net outflow while retail investors are chasing the rally to enter the market. Coupled with the company’s multiple clear warnings of trading risks, the current stock price rally is more characterized by sentiment-driven and capital game.

For short-term traders, under the current situation where the turnover rate exceeds 20% and main force capital continues to outflow, the risk of chasing the rally is extremely high, so it is recommended to remain cautious. Medium- to long-term investors need to recognize that the current stock price has a premium of about 85% compared to the institutional target price, and the valuation has seriously deviated from fundamentals. It is recommended to wait for the valuation to revert before considering participation. Value investors should note that the current price does not have a sufficient margin of safety. They can include it in the watch list and re-evaluate when the stock price pulls back below RMB 20 and the valuation tends to be reasonable.

The hot trend of Aerospace Electronics is more a product of market sentiment and sector rotation. Although there is a Q3 performance highlight in fundamentals, it is difficult to support the current valuation level. Considering that the company’s management has clearly warned that “there is a risk of a sharp short-term decline”, the risk-reward ratio of chasing the rally at the current level is not good. Investors should maintain a rational wait-and-see attitude and make decisions after the market sentiment returns to rationality.

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[1] Stockstar - Aerospace Electronics Sees Net Outflow of RMB 65.9395 Million in Main Force Capital on January 22

[2] Stockstar - Aerospace Electronics Sees Net Sale of RMB 65.9395 Million in Main Force Capital on January 22

[3] Eastmoney - Commercial Aerospace Rebounds, Wanjia Aerospace ETF Rises Over 2% in Straight Line at Opening

[4] China Finance Information Network - Announcement of Aerospace Electronics on the Company’s 2026 Annual Daily Operating Related Transactions

[5] Phoenix Net - Aerospace Electronics: Expected Total Annual Daily Operating Related Transactions in 2026 Not to Exceed RMB 10.72 Billion

[6] China Finance Information Network - Resolution of the First Meeting of the Board of Directors of Aerospace Electronics in 2026

[7] Sohu - Aerospace Electronics Discloses Announcement on Change of Project Quality Control Reviewer of Audit Institution

[8] CNFOL - Aerospace Electronics Sees Net Sale of RMB 65.9395 Million in Main Force Capital on January 22

[9] Tencent Net - Aerospace Electronics: The Company’s Stock Has an Obvious ‘Pass the Parcel’ Effect, with Risk of Sharp Short-Term Decline

[10] Tencent Net - Stock Price Rises 168% Cumulatively, Daily Turnover Reaches Nearly RMB 18 Billion, Aerospace Electronics Warns of Overheated Sentiment Risk