Guotai Haitong points out that the intensification of great power competition is a long-term trend, and increasing defense spending is a necessity, indicating a positive long-term outlook for the military industry. By 2027, China aims to achieve its centennial goal of military modernization, with accelerated efforts to address shortcomings during the 14th Five-Year Plan period. Recently, the military sector has performed well, and China's aerospace industry has made new progress, successfully launching the Pakistan Remote Sensing Satellite-01 (PRSS-01), demonstrating the maturity and stability of aerospace technology. Additionally, the ongoing tense international situation highlights the strategic importance of the defense and military industry. In the field of aerospace equipment, China's launch capabilities continue to strengthen, with the Kuaizhou-1A carrier rocket completing its 29th successful flight, further validating the industry's high prosperity.

Military Industry ETF (512660) tracks the CSI Military Industry Index (399967), which selects high-quality companies related to the military industry from China's A-share market, covering sectors such as aviation, aerospace, and armaments. The index components are primarily concentrated in the defense and military industry, reflecting the overall performance of listed companies in China's military sector, combining industry growth potential and strategic uniqueness.

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