On September 4th, the defense sector pushed higher once again, looking to secure its ninth gain in ten trading sessions. The benchmark index tracked by the Huabao Military ETF (512810) climbed as much as 2% intraday, with the core heavyweight stock leading the charge.
China Shipbuilding Industry saw its shares spike nearly 7% during morning trading, decisively breaking through both the half-year and annual moving averages. Data from the CSI Index Company shows that as of August 31st, China Shipbuilding Industry holds a 10.5% weighting in the CSI Military Industry Index, making it the largest constituent stock.
A confluence of positive catalysts has emerged. On September 2nd, a subsidiary of China Shipbuilding Industry signed a contract to build 10 LNG dual-fuel car carriers with 8,200-vehicle capacity each, with a total value exceeding $1 billion. This brings the company's cumulative major contract signings this year to over 35 billion yuan. As of the end of June, its order book stood at 729 vessels, totaling 93.89 million deadweight tons and valued at 526.266 billion yuan, with delivery schedules extending beyond 2030.
Strong fundamental momentum accompanies the share price surge. According to the company's 2026 interim report, first-half revenue reached 91.53 billion yuan, up 26.01% year-on-year, while net profit attributable to shareholders jumped 163.51% to 9.954 billion yuan. Deducted non-recurring gains and losses climbed even higher at 237.03% to 9.742 billion yuan. Notably, first-half profits have already surpassed the full-year 2025 total of 7.848 billion yuan. The second quarter alone contributed 5.122 billion yuan in net profit, marking two consecutive quarters above the 4 billion yuan threshold and setting fresh record highs.
The broader shipbuilding cycle continues to validate the positive outlook. Global new ship orders in the first half of 2026 surged 211.7% year-on-year, hitting an all-time high for the period. The Clarksons newbuilding price index remains at a historic peak of the 96.79th percentile. China's share of global shipbuilding output across all three major metrics now exceeds 60%.
Looking at the wider defense sector, the upcoming 15th Five-Year Plan is expected to be finalized before year-end. This, combined with the Zhuhai Airshow scheduled for December 7-13 and the anticipated disclosure of overseas orders, should continue to lift investor attention toward the sector. The current level may represent a favorable left-side entry point for investors.
For those seeking defense exposure, the Huabao Military ETF (512810) passively tracks the CSI Military Industry Index, offering comprehensive coverage across hot themes including commercial space, low-altitude economy, large aircraft, MLCC, military AI, and gas turbines. The fund is eligible for margin trading and Stock Connect access, providing an efficient tool for one-click investment in core military assets.
Data sources include public information from the Shanghai and Shenzhen exchanges and the CSI Index Company. Fund fees apply at standard rates for subscription and redemption through agency channels. Investors should note that the fund is rated R3-moderate risk, suitable for balanced investors and above. Past performance does not guarantee future results, and investors are advised to make independent investment decisions based on their own risk tolerance.
Please note that any individual stocks mentioned are for reference only and do not constitute investment advice or reflect the actual holdings of any fund under management. Investment in funds carries risks, and historical returns should not serve as a guarantee of future performance.