On June 3rd, the A-share market surged and then retreated, with the Shanghai Composite Index closing slightly up by 0.22%. The defense sector fluctuated in positive territory. The core defense asset—Huabao's Military ETF (512810)—climbed as high as 2.18% intraday before weakening, then bottomed out and rebounded in late trading to close up 0.82%, successfully reclaiming its annual moving average and ending a three-day losing streak on the daily chart. During the previous three-day decline, the fund saw net inflows exceeding 49 million yuan.
Constituent stocks were mixed. MLCC and commercial space concepts led the gains. Huoju Dianzi touched the daily limit-up intraday and closed up 9.08%, continuing to hit a new three-year high. Lianchuang Guangdian and Hangtian Dianqi rose over 7%, while Zhongguo Weixing gained 6.78%. On the downside, Haige Tongxin led the declines, falling 4.3%, and Hongyuan Dianzi dropped 2.38%.
MLCC concept stocks have been active recently, potentially driven by a confluence of three factors: surging demand from AI computing power, inflation in upstream metal materials, and accelerated import substitution amid geopolitical tensions. Some defense electronics firms, besides their military passive component businesses, also have civilian passive component operations in areas like AI server power supplies and power energy storage markets, potentially ushering in new growth drivers.
In the commercial space sector, on June 1st, the maiden flight of the Long March 12B carrier rocket was a complete success, successfully deploying the tenth batch of Qianfan constellation networking satellites into their planned orbit. More catalysts are expected, including the Q2 Zhuque-3 land recovery test, the Q3 Long March 10B sea recovery test, the maiden flight of Zhishenxing-1, and the second launch of LiJian-2, among others.
From a short-to-medium-term perspective, analysts point out that from June to July, domestic rocket and satellite-related catalysts will continue, while overseas, SpaceX is nearing its public listing. As a strong thematic sector, overall attention on the commercial space segment is expected to rise rapidly.
Regarding allocation timing, since mid-May, the defense sector has undergone continuous adjustments to digest valuation bubbles. At current levels, it offers a relatively attractive investment proposition. The latest trailing price-to-earnings (P/E) ratio for the underlying index of Huabao's Military ETF (512810) is 70.61 times, which is lower than it has been for more than half of the time over the past three years.
The fund, with the code containing "81" (symbolizing the military), aggregates cutting-edge defense technologies across "land, sea, air, and space," comprehensively covering hot themes like commercial space, military AI, large aircraft, and the low-altitude economy. It is also eligible for margin trading and the Stock Connect schemes, serving as an efficient tool for investing in core defense assets in one move.
Comments