On October 13, the defense sector staged an afternoon rally, leading the entire market for the first time in a long while. The CSI Military Industry Index fell as much as 1.87% in early trading before beginning to gather strength before noon, then surged more than 3% in the afternoon, closing up 2.4%. The Defense ETF Huabao (512810), which tracks the index, also reversed course and closed higher in tandem.
It is worth noting that just yesterday, the exchange closing price of 512810 hit its second-lowest level in nearly a year.
Among constituent stocks, Guoke Military Industry led gains at 12.24%, while AVIC-system stocks put in a stellar performance. Hongdu Aviation touched the daily limit before closing up 9.75%, AVIC Chengfei rose 8.19%, and AVIC Xifei gained 6.12%.
Major news breaks
CCTV News reported in the afternoon that the 16th China International Aviation and Aerospace Exhibition will be held in Zhuhai, Guangdong Province, from December 7 to 13, 2026. At this airshow, multiple types of main combat equipment from the Air Force will make their debut, reusable rockets will be displayed, and a platform for systematic demonstrations of drones and counter-drone systems will also be unveiled.
In addition, recently, AVIC Group brought its full spectrum of multi-type aviation equipment to the 2026 Azerbaijan International Defense Exhibition and the Marrakech Airshow, showcasing the achievements of China's systematic aviation equipment development and strengthening precision marketing efforts in markets such as North Africa, injecting new momentum into further deepening the aviation foreign trade market.
CICC pointed out that international airshows are concentrated display windows for aviation and other special equipment. The appearance of Chinese equipment reflects a signal of their influence in the global equipment market and helps further open overseas markets. The institution is bullish on allocation opportunities in the defense sector before year-end and recommends sub-sectors such as military trade and large aircraft.
According to a China Merchants Securities research report, global military trade deliveries exceed US$120 billion, with China currently accounting for about 5.8%. Breaking this down by structure, aviation equipment accounts for more than 40% of military trade, helicopters 10%, and air defense, anti-missile and missile systems 10%. With aviation equipment taking such a high share, there is enormous room for future breakthroughs in China's manned aircraft and air defense and anti-missile equipment markets.
To invest in defense, choose "Bayi"
The Defense ETF Huabao (512810) (formerly the National Defense Military Industry ETF), whose code contains "Bayi" (August 1st, the Army Day), passively tracks the CSI Military Industry Index, providing comprehensive coverage of hot themes such as military trade, commercial aerospace, large aircraft, and the low-altitude economy. It is also a margin trading and short selling plus Stock Connect target, making it an efficient tool for one-click investment in core defense assets.
Data source: Shanghai and Shenzhen stock exchanges, China Securities Index Co. and other public information. Institutional views: CICC October 13, 2026, "Special trade welcomes continuous catalysts, focus on progress in emerging fields." China Merchants Securities October 13, 2026, "Value military trade bringing breakthroughs to the defense industry, military-to-civilian conversion opens broad space." Fund fee rates: When investors subscribe to or redeem fund shares, the subscription and redemption agent may charge a commission of no more than 0.5%, which includes fees charged by stock exchanges, registration institutions and others.
Special notice: The risk level of the Defense ETF Huabao as assessed by the fund manager is R3-Medium Risk, suitable for investors with a balanced profile (C3) and above. Risk warning: The Defense ETF Huabao passively tracks the CSI Military Industry Index. The index base date is December 31, 2004, and it was published on December 26, 2013. Its annual historical returns/annualized volatility for 2021-2025 were: 14.28%/33.05%, -25.74%/23.44%, -11.02%/18.34%, 8.20%/34.39%, 31.55%/21.43%, respectively. The constituent stocks of the index are adjusted in a timely manner according to the index compilation rules. Past performance does not predict future results. The weights of individual stocks mentioned in this article in the CSI Military Industry Index can be found in the accompanying chart, with data as of July 31, 2026. Descriptions of individual stocks do not constitute investment advice in any form, nor do they represent the holdings or trading activities of any fund under the manager. The constituent stocks of the underlying index are adjusted in a timely manner according to the index compilation rules. Any information appearing in this article (including but not limited to individual stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only, and investors must be responsible for any investment decisions they make independently. In addition, any views, analyses and forecasts in this article do not constitute investment advice of any form to readers, nor does it assume any responsibility for direct or indirect losses caused by the use of the content of this article. Fund investment involves risks. Past performance of a fund does not represent its future performance. The performance of other funds managed by the fund manager does not constitute a guarantee of the fund's performance. Fund investment requires caution. MACD golden cross signals have formed, and these stocks are rising well!
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