On August 19, 2026, the Zhuque-3 Yao-2 launch vehicle lifted off from the Dongfeng Commercial Aerospace Innovation Test Zone and successfully completed its flight mission, with its first stage executing a ground recovery as programmed. This mission not only marks a significant breakthrough in China's reusable rocket technology but also achieves the historic milestone of recovering a first stage via landing legs for the first time. For investors seeking exposure, the military defense ETF, Huabao Defense ETF (512810), serves as a relevant investment tool.

Following the launch, the first stage of the Zhuque-3 Yao-2 landed precisely on the designated landing pad in Minqin County, Gansu Province, following its predetermined sequence. This achievement solidifies Zhuque-3's status as the nation's first orbital rocket to successfully execute a land-based recovery. Notably, this follows the July 10 success of the Long March 10B rocket, which achieved a vertical return on a maritime recovery platform, marking China's first controlled recovery of a rocket first stage and the world's first net-based recovery system for launch vehicles.

What does this mean for the sector? The successful ground recovery of the Zhuque-3 Yao-2 underscores a historic leap forward in China's reusable launch vehicle capabilities. This mission marks the nation's inaugural recovery of a reusable rocket first stage using landing legs, validating the reliability and soundness of the technical approach. It lays a crucial groundwork for future launch services and dependable first-stage recovery operations. According to a representative from LandSpace, the company has outlined a clear plan to conduct a reflight test of the recovered rocket body within six months, aiming to establish a complete closed-loop process encompassing launch, recovery, inspection, and reuse. By adhering to the liquid oxygen-methane recoverable pathway, the firm is committed to honing high-frequency reuse capabilities, paving the way for low-cost, scalable commercial launches.

Globally, satellite internet construction is accelerating, and the deployment of low-orbit satellite constellations demands sustained, large-scale, and cost-effective launch capabilities. The successful reflight of Zhuque-3 not only fills a technical void in China's large-payload reusable liquid rockets but also drives the shift toward high-frequency operations in the commercial rocket sector, thereby accelerating the industrialization of commercial aerospace.

On the investment front, Zhuque-3's first-ever landing leg recovery validation tackles critical challenges such as thermal protection during atmospheric reentry and engine thrust modulation. It showcases the immense potential of the liquid oxygen-methane plus stainless steel architecture in achieving low-cost, high-frequency reuse, directly benchmarking against leading global reusable rocket systems. This provides robust support for the large-scale constellation deployment of China's satellite internet. As reusable technology transitions from successful orbital insertion to a full recovery-and-reuse loop, the commercial aerospace industry may be on the cusp of an industrialization boom, effectively lowering launch expenses and boosting launch cadence. Earlier, the Long March 10B rocket also achieved a world-first maritime net recovery, collectively underscoring the comprehensive upgrade of China's high-end manufacturing and aerospace supply chain capabilities.

Overall, the commercial aerospace sector is witnessing continuous catalysts and rapid technological evolution, with a clear long-term upward trajectory and substantial investment value and growth potential. It is advisable to focus on core beneficiaries within the industry chain. The Huabao Defense ETF (512810), formerly known as the National Defense ETF, passively tracks the CSI Military Industry Index, offering comprehensive coverage of hot themes such as commercial aerospace, low-altitude economy, large aircraft, MLCC, military AI, and gas turbines, with commercial aerospace content exceeding 78%. It is also eligible for margin trading and Stock Connect, serving as an efficient tool for one-click investment in core military defense assets. Data sourced from the Shanghai and Shenzhen stock exchanges and public disclosures.

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Risk Disclosure: The Huabao Defense ETF passively tracks the CSI Military Industry Index, with a base date of December 31, 2004, and a release date of December 26, 2013. The annual returns/annualized volatility for 2021-2025 were 14.28%/33.05%, -25.74%/23.44%, -11.02%/18.34%, 8.20%/34.39%, and 31.55%/21.43%, respectively. Index constituent stocks are adjusted according to the index compilation rules, and past performance does not predict future results. The index constituents mentioned are for illustrative purposes only and do not constitute investment advice of any form, nor do they represent the holdings or trading activities of any fund under the manager's purview. The risk rating of the Huabao Defense ETF assessed by the fund manager is R3-Medium Risk, suitable for investors with a balanced (C3) risk profile or above. Any information presented herein (including but not limited to individual stocks, commentary, forecasts, charts, indicators, theories, and any form of expression) is for reference only. Investors must bear full responsibility for their own investment decisions. Furthermore, any views, analyses, or forecasts in this article do not constitute investment advice to readers of any kind, nor do they assume any liability for 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, and the performance of other funds managed by the fund manager does not guarantee the fund's performance. Please invest with caution.