The defense industry has continued its rebound, and Great Wall Defense Industry hit the daily limit! Huabao Fund Military Industry ETF(512810) touched a 2% gain and maintained a consecutive streak of rising candles from a low level. Looking ahead, keep an eye on three major catalysts in the market!

On March 25, A-shares continued to recover, with the SSE Composite Index reclaiming the level of 3,900 points. Technology and growth assets broadly rose; defense industry stocks opened strong and kept climbing. Great Wall Defense Industry hit the daily limit and closed at the cap. Hongdu Aviation and Construction Industry rose by more than 8% to lead the pack, while key stocks such as QiGuang Technology and AVIC Opto-Electronics rose by more than 2%.

Defense-industry core assets—Huabao Military ETF (512810)—rose to an intraday high of 2.27% at the open, and closed up 1.87%, successfully extending the streak of green days, with trading volume of RMB 45.08 million.

Can this defense-industry rebound rally continue? On the news front, you may want to watch the following catalysts:

First, the geopolitical situation. The situation in the Middle East remains highly uncertain; on the one hand, it highlights the strategic position of the defense industry. On the other hand, the activity in the international military trade market is expected to keep rising. China is one of the few equipment suppliers that can provide a full set of high-quality solutions, so overseas demand for weapons and equipment is expected to increase.

Second, AI + defense. In this geopolitical conflict, artificial intelligence has accelerated the military “kill chain.” Currently, the space and defense industry is seeing a clear acceleration driven by AI-enabled OODA loop closure. Over the medium to long term, in terms of the “15th Five-Year Plan” equipment buildout, efforts will focus on new domains and new-quality forces. Unmanned intelligent systems, hypersonic weapons, low-cost munitions, and military AI are core incremental directions.

Third, commercial space. As a representative industry of new-quality productive forces in the defense sector, major events in the commercial space field are expected to boost the sector’s market 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 sharply; Huabao Military ETF (512810) among the exchange-traded funds tested a new intra-year low in its on-exchange price. After two consecutive days of rebound, the current price is still below the 6-month moving average, offering a favorable value-for-allocation setup.

[Invest in defense industry; choose “August 1”] The Huabao Military ETF (512810) with “August 1” (the former National Defense Industry ETF) pools cutting-edge military defense technology across “sea, land, air, and space,” fully covering popular themes such as “commercial space, large aircraft, low-altitude economy, and defense AI,” etc. It is also an underlying asset for margin trading, securities lending, and cross-market interconnection, serving as an efficient tool to invest in core defense-industry assets with one click.

Data source: Shanghai and Shenzhen stock exchanges, and public information.

Note: When investors apply for subscription or redemption of fund shares, subscription and redemption agents may charge a commission according to a standard not exceeding 0.5%, including relevant fees collected by the securities exchange, the registration institution, and others.

Risk warning: Huabao Military ETF passively tracks the CSI Military Industry Index. The index base date is 2004.12.31, and it was published on 2013.12.26. The index constituents mentioned in the text are for display purposes only. The descriptions of individual stocks do not constitute any form of investment advice, nor do they represent the holdings or trading intentions of any funds under the manager. The composition of the underlying index constituents is adjusted in a timely manner according to the compilation rules of that index. The risk level assessed by the fund manager for Huabao Military ETF is R3—medium risk—suitable for investors who are balanced (C3) or above. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of statements) is for reference only. Investors are responsible for any investment actions they make independently. Also, any views, analyses, and forecasts in this article do not constitute any form of investment advice to readers, nor does the fund bear responsibility for any direct or indirect losses arising from the use of the content of this article. Investing in funds involves risk. Past performance of the fund does not indicate its future performance. Performance of other funds managed by the fund manager does not guarantee the performance of the fund. Investors should be cautious when investing in funds.

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