On March 9, influenced by geopolitical factors, the Asia-Pacific markets experienced a broad decline, with A-shares also falling. The Shanghai Composite Index dropped over 1.5%. The military sector adjusted alongside the market, halting a three-day rising streak. The core military asset, the Huabao Military ETF (512810), fell more than 3%, breaking below its 20-day moving average. The fund frequently traded at a premium intraday, indicating active buying on dips.
Among the 80 constituent stocks of the Huabao Military ETF (512810), over 70 ended lower. Huafeng Technology led the decline, dropping over 9%. Stocks such as Filight and Bright Laser Technologies fell more than 7%. Heavyweight constituents China CSSC Holdings Limited and AECC Aviation Power Corporation declined over 3%. In contrast, Beijing BDStar Navigation Co., Ltd. bucked the trend, rising over 6%.
On the news front, international geopolitical shocks continue to develop. On the afternoon of March 6, Eastern Time, former US President Donald Trump stated on social media that US defense contractors had agreed to "quadruple" production of " sophisticated" weapons.
Domestically, according to the draft report on the central and local budgets for 2026 released on March 5, China's national defense expenditure for 2026 is budgeted at 1,909.561 billion yuan, a year-on-year increase of 7%. This marks the fifth consecutive year since 2022 that China's military budget growth has exceeded 7%.
Institutional analysis points out that with the growth of the military budget in 2026, equipment procurement expenses for the military are expected to increase, potentially leading to an acceleration in industry orders and injecting new vitality into the military equipment supply chain.
From a secondary market perspective, Huatai Securities noted in its latest A-share strategy that market conditions may enter a volatile period due to external uncertainties. It suggested focusing on sectors like defense, where景气度 is improving and valuations are reasonable.
The Huabao Military ETF (512810), whose code contains the numbers "81" - a symbolic reference to the military - aggregates cutting-edge military technologies across "land, sea, air, and space." It provides comprehensive coverage of popular themes including commercial aerospace, large aircraft, low-altitude economy, satellite navigation, military informatization, and controllable nuclear fusion. It is also eligible for margin trading and southbound stock connect, making it an efficient tool for investing in core military assets with a single transaction.
Data sources: Shanghai Stock Exchange, Shenzhen Stock Exchange, public information.
Note: When subscribing for or redeeming fund shares, subscription/redemption agents may charge a commission of up to 0.5%, which includes relevant fees charged by stock exchanges and registration institutions.
Risk提示: The Huabao Military ETF passively tracks the CSI National Defense Index. The base date for this index is December 31, 2004, and it was published on December 26, 2013. The constituent stocks mentioned are for illustrative purposes only; descriptions of individual stocks are not investment advice of any form and do not represent the holdings or trading动向 of any fund managed by the management company. The composition of the underlying index's constituents is adjusted according to its compilation rules. The fund manager assesses the risk等级 of the Huabao Military ETF as R3-Medium risk, suitable for investors with a Balanced (C3) or higher risk profile. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors are responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any kind to the reader, and no responsibility is accepted for any direct or indirect losses resulting from the use of this content. Fund investment carries risks. The past performance of a fund does not indicate its future returns. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Invest cautiously.
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