On the morning of January 20, the military sector opened slightly higher before quickly turning lower. The Huabao Military ETF (512810) fell as much as 3.85% intraday, with hot commercial aerospace stocks leading the decline. Stocks like Aerospace CH Development, China Aerospace Times Electronics, China Spacesat Co.,Ltd., and Haige Communications saw collective drops exceeding 7% at one point.
What happened? The market style shifted abruptly in the morning session, with the three major A-share indices all declining. Dividend assets rose while technology stocks turned negative across the board, reflecting a rapid shift in market risk appetite.
On the capital flow front, the margin balance in the A-share market was reported at 2,705.9 billion yuan on January 19, a decrease of 8.5 billion yuan from the previous day. This not only ended the previous ten-day consecutive increase but also marked the first decline since December 31 of last year. From an industry perspective, electronics, communications, and defense/military industries were the key sectors where margin traders reduced their positions yesterday.
As a growth sector with relatively high volatility, the military industry is significantly influenced by short-term sentiment. However, the fundamental outlook remains sound, and the core investment thesis is unchanged.
Founder Securities stated that with the centenary goal of the People's Liberation Army approaching, they judge the industry is entering a new upward cycle. On the domestic demand front, the batch production of previously finalized products, combined with the transition to batch production of new models during the "16th Five-Year Plan" period, is expected to lead to sustained order placements. Regarding foreign trade, China's military exports have recently completed a triple leap: shifting from "cost-effective alternatives" to "technological benchmarks," from "single-product exports" to "integrated solutions + service ecosystems," and from being "market participants" to becoming "rule-makers." Against the backdrop of a new global arms race, China's military trade market is poised to seize a historic opportunity.
Driven strongly by both domestic demand and foreign trade, China's military industry is expected to enter a long-term growth channel. Currently, the traditional military sector combines positional advantages, potential event catalysts, and expectations of marginal improvement in fundamentals, presenting an important timing opportunity for allocation. The combined forces of new combat capabilities and new productive forces are creating new growth poles for the industry, with military trade potentially becoming a second growth curve.
[To invest in the military sector, choose the "August 1st" code] The Huabao Military ETF (512810) (formerly the National Defense Military ETF), whose code contains "81," covers many hot themes such as "commercial aerospace, low-altitude economy, large aircraft, satellite navigation, military informatization, and controlled nuclear fusion." It is also a margin trading and southbound connect target, making it an efficient tool for one-click investment in core military assets.
Data source: iFinD, as of January 18, 2026. The aforementioned thematic weightings refer to the Commercial Aerospace Index (886078), Low-Altitude Economy Index (886067), Large Aircraft Index (885566), Satellite Navigation Index (885574), Military Informatization Index (886076), and Controlled Nuclear Fusion Index (886065). Broker view source: Founder Securities report dated January 10, 2026, titled "US 2027 Military Budget May Increase by 50%; Military Sector Presents Investment Opportunities Amid Global Arms Race." Note: When subscribing for or redeeming fund units, 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 Military Index, which has a base date of December 31, 2004, and was published on December 26, 2013. Individual stocks mentioned are listed solely for the objective illustration of index constituents and do not constitute recommendations for any specific stock, nor do they represent the investment direction of the fund manager or the fund. Any information appearing in this article (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and expressions of any form) is for reference only. Investors are solely responsible for any independent investment decisions. Furthermore, any views, analysis, or forecasts in this article do not constitute investment advice of any form to the reader, and the company assumes no responsibility for any direct or indirect losses arising from the use of this content. Investors should carefully read the Fund Contract, Prospectus, Fund Product Key Facts Statement, and other legal fund documents to understand the fund's risk-return characteristics and select products that match their own risk tolerance. Past performance of a fund is not indicative of its future results. The performance of other funds managed by the fund manager does not guarantee the performance of this fund. Based on the fund manager's assessment, the fund's risk rating is R3-Medium Risk, suitable for Balanced (C3) and above investors. Suitability matching opinions are subject to the selling institution. Selling institutions (including the fund manager's direct sales channels and other selling institutions) evaluate the risk of the above fund according to relevant laws and regulations. Investors should promptly pay attention to the suitability opinions issued by the fund manager. Suitability opinions from different selling institutions may not necessarily be consistent, and the risk rating evaluation results for the fund product issued by fund selling institutions shall not be lower than the risk rating evaluation result made by the fund manager. There may be differences between the fund's risk-return characteristics described in the fund contract and its risk rating due to different consideration factors. Investors should understand the fund's risk-return profile and carefully select fund products based on their own investment objectives, time horizon, investment experience, and risk tolerance, bearing the risks themselves. The China Securities Regulatory Commission's registration of the above funds does not indicate a substantive judgment or guarantee of their investment value, market prospects, or returns. Fund investment involves risks.
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