The military industry continues to rebound, with China Great Wall Military Industry hitting the daily limit! Huabao Fund's Military Industry ETF rose up to 2% and maintained a consecutive upward trend from the lows. Watch for threefold catalysts in the future market.

On March 25, A-shares continued to recover, and the CSI 300 Index (沪指) returned above 3,900 points. Tech growth assets generally rose. The defense industry segment opened strong and kept climbing, with Great Wall Defense (长城军工) hitting the daily limit and sealing the board. Hongdu Aviation (洪都航空) and Construction Industry (建设工业) led with gains of over 8%. Among heavyweight stocks, Qikie Technology (光启技术) and AVIC Optoelectronics (中航光电) rose by more than 2%.

Defense core asset—Huabao Defense ETF (512810) rose as much as 2.27% at the start of trading and finished up 1.87%, successfully posting a second consecutive day of gains. **

Can the defense industry recovery rally continue? On the news front, the following catalysts may be worth watching:

First, the geopolitical situation. The Middle East situation is complex and fluid. On one hand, it highlights the strategic position of the defense industry; on the other hand, international arms trade market activity is expected to continue improving. China is one of the few equipment suppliers capable of providing complete high-quality solution sets, so overseas demand for weapons and equipment is likely to rise.

Second, AI + defense. In this geopolitical conflict, artificial intelligence has accelerated the military “kill chain.” Currently, the aerospace and defense sector is being driven to speed up significantly by AI-enabled OODA loop closure. In the medium to long term, with “the 15th Five-Year Plan / 十五五” equipment construction focusing on new domains and new quality, unmanned intelligent systems, hypersonic weapons, low-cost munitions, and military AI will be core incremental directions.

Third, commercial space. As a representative industry of new-quality productive forces in defense, major events in the commercial space sector may boost the sector’s performance. It is reported that SpaceX plans to submit its IPO prospectus this week or next week, with expected fundraising of more than $75 billion, a company valuation of $1.25 trillion, and a target listing in June.

In the secondary market, on Monday (March 23), the market plunged, and Huabao Defense ETF (512810)’s intraday price fell to a new intrayear low. After two consecutive days of rebound, the current price is still below the 6-month moving average, offering a favorable risk-reward for allocation.

【Invest in defense, choose “August 1st”】 The Huabao Defense ETF (512810), which has “August 1st” in its code (原国防军工ETF), brings together cutting-edge defense technologies across sea, land, air, and space. It fully covers popular themes such as 『commercial space, big aircraft, low-altitude economy, and defense AI』. At the same time, it is also a margin financing and securities lending + interconnection underlying asset, an efficient tool for one-click investing in defense core assets.

Data source: Shanghai and Shenzhen Stock Exchanges, and public information.

Note: When investors apply for subscriptions or redemptions of fund shares, the subscription and redemption agent may charge a commission at a rate not exceeding 0.5%, which includes related fees charged by the securities exchanges, registration institutions, and others.

Risk warning: Huabao Defense ETF passively tracks the CSI Defense Industry Index. The base date of this index is 2004.12.31, and it was published on 2013.12.26. The index constituent stocks mentioned in the text are only for demonstration purposes. The description of individual stocks does not constitute any form of investment advice, nor does it represent any information about holdings or trading activity of any fund under the manager’s management. The composition of the index’s constituent stocks is adjusted from time to time according to the index compilation rules. The fund manager’s assessed risk level for Huabao Defense ETF is R3—medium risk—and it is suitable for investors of balanced type (C3) and above. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of statements) is for reference only. Investors must be responsible for any investment actions they decide independently. Also, any opinions, analyses, and forecasts in this article do not constitute any form of investment advice to readers, and neither direct nor indirect losses arising from the use of this article’s contents shall be borne by us. Fund investments involve risk. Past performance of a fund does not guarantee its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of this fund’s performance. Investors should invest cautiously.