Dual-engine drive, the military industry sector continues to rebound! Huabao Fund Military Industry ETF (512810) quickly surges by 2%!

On March 25 at the market open, the Huabao Military Industry ETF (512810) saw sustained gains during the session, with the on-exchange price rising by more than 2% at one point. In terms of component stocks, Jingjin Technology, China Dynamics, and Yingliu Co., Ltd. performed the best, with gains of 5.03%, 4.19%, and 4.13%, respectively.

Changjiang Securities said that the defense industry’s business cycle is likely to remain favorable. As aviation equipment is a core area, it will directly benefit. In the latter half of the “14th Five-Year Plan,” mass production of new models and upgrades and replacement of older models will drive the industry’s continued growth. Demand in the aviation engine and military aircraft industry chain is clear, and the industry’s fundamentals are solid.

Securities firms Shenwan Hongyuan said that China’s national defense equipment construction is entering a new cycle driven by a dual-engine approach: “steady growth in traditional defense industries” and the “release of potential for military technology to be converted for civilian use.” In traditional defense industry sectors, in combination with key milestones such as the centennial goal of building the Army, the continuous improvement of military equipment quality and increased quantity in a systematic, long-term process. The spillover of defense technology, in turn, gives rise to and empowers emerging industries such as commercial aerospace, the two-aircraft sector (aviation engines and gas turbines), and controllable nuclear fusion, collectively opening up the industry’s long-term growth ceiling. At the same time, the overall scale of global arms trade is moving upward, and China’s share in the arms trade market still has substantial room for increase. The arms-trade business is expected to further improve suppliers’ revenue scale and profitability.

Huabao Military Industry ETF (512810) passively tracks the CSI Military Industry Index. The index’s top ten weighted stocks are China Shipbuilding, AE Power, Qigo Technology, Aerospace Electronics, Feilihu, China Satellite, AVIC Shenyang Aircraft, AVIC Optoelectronics, Rui Chuang Micro-Nano, and AVIC Xi’an Aircraft.

Data sources include the Shanghai and Shenzhen Stock Exchanges, public information, and others.

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Responsible editor: Yang Ci