The aerospace and defense sector experienced a pullback on August 19, with Guanglian Aviation dropping over 9% to lead declines, Aerospace Huanyu falling more than 8%, and Wanfeng Aowei and AVIC Zhaowei each sliding over 3%. Despite the market softness, investors moved to capitalize on the dip, with the General Aviation ETF Huabao (159231)—which offers exposure to commercial space, satellite navigation, low-altitude economy, and large aircraft themes—recording net subscriptions of 6 million units in real-time.
On the news front, early on August 19, China achieved its first-ever land recovery of a rocket. Zhuque-3 became the country's first launch vehicle to successfully reach orbit and return via land landing. The Zhuque-3 Y2 rocket lifted off from the Dongfeng Commercial Aerospace Innovation Test Zone, with its first stage landing precisely on the designated landing pad in Minqin County, Gansu Province—a significant milestone in China's reusable rocket technology development.
Additionally, according to financial media reports, CAS Space's independently developed Lixun-1 upper stage successfully completed its power system integration test, delivering 20 kilonewtons of thrust with a calculated specific impulse of 315 seconds. This marks the first high-thrust upper stage in China's commercial space sector, with its maiden flight scheduled for the first quarter of 2027.
In parallel, Jiangsu Province recently issued its "Three-Year Action Plan for High-Quality Development of Commercial Space (2026–2028)," setting major breakthroughs in high-capacity and reusable rockets as a top priority. The plan targets annual output value of 60 billion yuan from key enterprises by 2028, with satellite manufacturing capacity exceeding 200 units per year. Meanwhile, the China National Space Administration continues to release research project guidelines for reusable launch vehicles, providing programmatic support for recovery technology development.
According to a research note from Huatai Securities, vertical integration across the industry chain is the ideal model for commercial space, with rocket companies better positioned to achieve such consolidation. Drawing from the development trajectories of SpaceX and Rocket Lab in the United States, the report notes that vertical integration is the prevailing trend in commercial space, and companies with full-chain integration capabilities—covering rocket launch, satellite manufacturing, and satellite operations—are likely to gain a competitive edge.
Domestic reusable rocket technology is expected to accelerate, with multiple recoverable rocket models potentially entering routine, flight-like launch phases. The cost-reduction effects and increased launch frequency from reusable rockets are set to benefit the entire aerospace industry, driving rapid growth across China's space sector.
The General Aviation ETF Huabao (159231) and its feeder funds (Class A: 024766; Class C: 024767) track an index that comprehensively covers 50 aerospace component stocks, spanning hot areas such as low-altitude economy, commercial space, satellite navigation, large aircraft, drones, and military aircraft. The index features over 90% exposure to low-altitude economy concepts, more than 60% to commercial space, and over 45% to satellite navigation, positioning it as a one-stop tool for allocating to China's aerospace industry chain.
Market volatility may remain elevated in the near term, and short-term gains or losses do not predict future performance. Fund investments carry the risk of loss. Investors are advised to make decisions based on their own financial situation and risk tolerance, with careful attention to position sizing and risk management. Data sources include the Shanghai and Shenzhen stock exchanges and iFind, with related concept indices being 886067.TI (low-altitude economy), 886078.TI (commercial space), and 885574.TI (satellite navigation). Concept exposure is calculated as the combined weight of overlapping constituent stocks between the General Aviation Index and the respective concept indices, as of June 30, 2026.
Fee disclosures: The General Aviation ETF does not charge sales service fees, and subscription/redemption agents may charge commissions up to 0.5%. On-exchange trading fees are determined by the securities firm. For the Huabao General Aviation ETF Feeder Fund Class A, subscription fees are: 1,000 yuan per transaction for amounts above 2 million yuan; 0.6% for 1–2 million yuan; 1% for amounts below 1 million yuan. Redemption fees are 1.5% for holdings under 7 days and 0% for holdings over 7 days, with no sales service fee. For Class C, redemption fees are 1.5% for holdings under 7 days and 0% for holdings over 7 days, with a sales service fee of 0.25% per year.
Institutional reference opinion source: Huatai Securities, August 19, 2026, "Aerospace Defense Dynamic Review: China's First Land Recovery of a Reusable Rocket." Risk warning: The General Aviation ETF Huabao passively tracks the Guozheng General Aviation Industry Index, with a base date of June 29, 2012, and a publication date of December 28, 2012. Index constituent stocks are adjusted periodically according to the index methodology, and backtested historical performance does not predict future index performance. Constituent stocks shown in this article are for illustrative purposes only, and individual stock descriptions do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund under the fund manager's management. The fund manager assesses this fund's risk level as R3—medium risk, suitable for investors with a balanced (C3) risk profile or above. Suitability matching opinions should be confirmed with the sales institution. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, or any form of expression) is for reference only, and investors are solely responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers of any form, and the author assumes no responsibility for direct or indirect losses arising from the use of this content. Fund investments carry risks; past performance of funds does not represent future performance, and the performance of other funds managed by the fund manager does not constitute a guarantee of fund performance. Investors should invest in funds with caution.
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