On August 6, the military sector showed localized activity, with core military assets—specifically, the Hwabao Fund Military ETF (512810)—trading in positive territory, aiming for its fifth consecutive daily gain. Among its constituent stocks, MLCC and commercial aerospace concepts led the rally: 旭光电子 rose nearly 6%, while China Satellite gained over 4%.

On the news front, tight production capacity combined with rising raw material costs have prompted two major MLCC suppliers from Japan and South Korea to initiate a new round of price increases. Samsung Electro-Mechanics recently notified its sales partners that, effective August 1, MLCC product shipment prices will be uniformly raised by 30% from current levels. Taiyo Yuden also announced a price increase for MLCCs shipped starting September 1. In the commercial aerospace sector, on August 4, China successfully launched a group of 23 low-orbit satellites for satellite internet. This mission marked the first full-system verification flight following a complete performance upgrade of the Long March 8A rocket, achieving a "direct express" function for the first time, which saves months of orbit-raising time for satellites.

Where to focus on military sector opportunities

Regarding current opportunities in the military sector, AVIC Securities pointed out that negative expectations have been fully, or even excessively, priced in. Downside risk may be limited, while upward elasticity is building. The current risk-reward ratio and win rate have converged to a highly attractive range, suggesting a strategic allocation window may be emerging.

Investing in military through the "August 1" code

The Hwabao Fund Military ETF (512810) (formerly the National Defense and Military ETF), with its "August 1" code, passively tracks the CSI Military Industry Index. It provides comprehensive coverage of popular themes including commercial aerospace, low-altitude economy, large aircraft, MLCC, military AI, and gas turbines. It is also eligible for margin trading, securities lending, and Stock Connect, making it an efficient tool for one-click investment in core military assets.

Data sourced from Shanghai and Shenzhen stock exchanges and public information. Institutional views sourced from AVIC Securities' July 26, 2025 report "Military Industry Weekly Report: Public Fund Military Holdings Hit New Lows Since 2023, Foreign Fund Military Holdings Hit New Highs."

Note: When investors subscribe or redeem fund shares, the subscription and redemption agent may charge a commission of up to 0.5%, which includes fees charged by the stock exchange and registration institution.

Risk disclosure

The Hwabao Fund Military ETF (512810) passively tracks the CSI Military Industry Index. The index base date is December 31, 2004, and it was released on December 26, 2013. Historical annual returns/volatility for 2021-2025 are: 14.28%/33.05%, -25.74%/23.44%, -11.02%/18.34%, 8.20%/34.39%, and 31.55%/21.43%. The composition of index constituent stocks is adjusted from time to time according to the index compilation rules. Past performance does not guarantee future results. The constituent stocks shown in this article are for illustrative purposes only. Descriptions of individual stocks do not constitute any form of investment advice and do not represent the holdings or trading intentions of any fund managed by the fund manager. The composition of the underlying index constituent stocks is adjusted according to the index compilation rules. The Hwabao Fund Military ETF (512810) is assessed by the fund manager as risk level R3 (medium risk), suitable for investors with a balanced (C3) or higher risk profile. Any information appearing in this article (including but not limited to stocks, comments, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must be responsible for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers and shall not be held liable for any direct or indirect losses arising from the use of this content. Fund investment carries 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 fund performance. Fund investment should be undertaken with caution.