Military-sector shares staged a sharp rebound on September 8, with aerospace-defense names leading the charge as AECC Aviation Power Co.,Ltd. (SH: 600893) advanced more than 5% and Avic Airborne Systems climbed over 3%.
The heavyweight China State Shipbuilding Corporation extended its winning streak to four consecutive sessions, hitting a three-month intraday high during trading. The benchmark CSI Military Industry Index, tracked by the Huabao Military ETF (512810), gained more than 1% in the session.
Index data from CSI as of August 31 shows that China State Shipbuilding Corporation and AECC Aviation Power held weightings of 10.5% and 3.62% respectively in the CSI Military Industry Index, ranking as the first and fourth largest constituents.
How to approach the current opportunity
At the news front, AECC Aviation Power announced plans to transfer its aviation-engine manufacturing asset group, with a book value of 26.386 billion yuan and liabilities of 15.483 billion yuan, at no cost to its wholly-owned subsidiary Xi'an Hongqi Aviation Engine Co., Ltd. Following the transfer, the subsidiary's registered capital will expand to 8.001 billion yuan.
Industry analysts point out that concentrating similar manufacturing assets into specialized subsidiaries represents a core strategy for central SOE defense conglomerates pursuing professional integration, with long-term benefits reflected in business focus and streamlined management structures.
Strong fundamentals bolster heavyweight names
On the fundamental side, both index heavyweights delivered robust interim results. AECC Aviation Power posted first-half revenue of 20.755 billion yuan, up 47.21% year-over-year and marking a record high for the period since listing. Its non-GAAP net profit surged an extraordinary 424.91% to 202 million yuan.
Meanwhile, China State Shipbuilding Corporation reported attributable net profit of 9.954 billion yuan for the first half, jumping 163.51% year-over-year and already surpassing its full-year 2025 result of 7.848 billion yuan.
Looking at the broader military sector, the 15th Five-Year Plan is expected to be finalized by year-end, while the upcoming Zhuhai Airshow (December 7-13) and subsequent disclosure of export orders could sustain investor interest in defense stocks. Market participants suggest that the current phase may represent an opportune entry point for position-building on the left side of the curve.
For investors seeking defense exposure, the Huabao Military ETF (512810), formerly known as the National Defense ETF, passively tracks the CSI Military Industry Index, offering comprehensive coverage of themes including commercial aerospace, low-altitude economy, large aircraft, MLCC components, military AI, and gas turbines. The fund is also eligible for margin trading and connect program participation, serving as an efficient tool for one-click investment in core military assets.
Data sources include public information from the Shanghai and Shenzhen stock exchanges and CSI. Fee structure: subscription and redemption agents may charge commissions of up to 0.5%, inclusive of fees levied by securities exchanges and registration institutions.
Risk disclosure: The fund manager has assessed the risk level of the Huabao Military ETF as R3-moderate risk, suitable for investors classified as balanced (C3) and above. The fund passively tracks the CSI Military Industry Index, which has a base date of December 31, 2004, and was launched on December 26, 2013. Historical annual returns/volatility for 2021–2025 are as follows: 14.28%/33.05%, -25.74%/23.44%, -11.02%/18.34%, 8.20%/34.39%, and 31.55%/21.43%. Index constituent composition adjusts periodically per index rules, and past performance does not indicate future results. Individual stock weightings cited in this article reflect data as of July 31, 2026. Company mentions do not constitute investment advice in any form, nor do they represent holdings or trading activities of any fund under the manager's umbrella. Any information presented herein, including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, or any form of expression, is for reference purposes only. Investors bear full responsibility for their own investment decisions. Views, analyses, and projections in this article do not constitute investment advice to readers and shall not be held liable for any direct or indirect losses arising from use of this content. Fund investment carries risks. Past performance of a fund does not guarantee future results, and performance of other funds managed by the same manager does not constitute a guarantee of fund performance. Invest with caution.