Group 1: Market Trends - In the early trading session, major funds saw net inflows in sectors such as defense, non-bank financials, and electronics, while there were net outflows in computer, non-ferrous metals, and machinery sectors, with the computer sector experiencing a net outflow exceeding 5.3 billion [1] - As of July 28, the Defense ETF (512670.SH) rose by 1.22%, and its associated index, the China Defense Index (399973.SZ), increased by 1.42% [1] Group 2: Military Equipment Developments - On July 21, the China Weapon Industry Group conducted a demonstration of unmanned and counter-unmanned combat systems, showcasing new combat capabilities in the unmanned domain [2] - Unmanned systems, particularly loitering munitions, are expected to play a crucial role in future combat, offering low-cost advantages and high lethality against valuable targets [2] Group 3: Investment Insights - In Q2 2025, active funds increased their allocation to military industry stocks, with an overweight increase of 0.35 percentage points from Q1, indicating a growing interest in military trade and new combat capabilities [3] - The military trade sector is anticipated to become a second growth driver, with significant performance potential in the context of recovering market conditions [3] - Key stocks in the military sector include AVIC Shenyang Aircraft Company, Guorui Technology, and Inner Mongolia First Machinery Group, among others, which are expected to benefit from increased demand and investment [3][4]

Group 1 - The defense ETF (512670.SH) increased by 3.37%, with its associated index, the Zhongzheng Defense (399973.SZ), also rising by 3.37% [1] - Major constituent stocks such as AVIC Shenyang Aircraft (中航沈飞) rose by 5.48%, AVIC Chengfei (中航成飞) by 6.41%, and AVIC Optoelectronics (中航光电) by 2.55% [1] - The defense and military sector experienced a rebound, with stocks like Tianjian Technology and Chengfei Integration achieving four consecutive trading gains, driving significant market interest [1] Group 2 - The favorable logic for the defense industry includes short-term tensions between India and Pakistan, medium-term acceleration of project 145, and long-term shifts in military trade orders from Europe and the U.S. to China [2] - The ceasefire between India and Pakistan is not fully stable, with recent skirmishes indicating potential ongoing military engagements and equipment testing [2] Group 3 - Related products include the Defense ETF (512670) [3] - Associated stocks include AVIC Optoelectronics (002179), AVIC Shenyang Aircraft (600760), AVIC Power (600893), AVIC Xifei (000768), AVIC onboard (600372), and others [3]