AVIC Shenyang Aircraft Co Ltd: A Surge in Defense Stocks Amidst Pakistan’s Arms Purchase

On June 9, 2025, shares of Chinese defense companies experienced a significant rally following Pakistan’s announcement of its intention to purchase advanced fighter jets from China. Among these companies, AVIC Shenyang Aircraft Company, the manufacturer of China’s J-35 stealth fighter jet, saw its shares soar by over 10% on the Shanghai Stock Exchange.

Market Reaction and Performance

The announcement has notably impacted the broader market, with the A-share market witnessing a five-day winning streak. The Shanghai Composite Index closed at 3399.77 points, marking a 0.43% increase. The A500 index ETF, a popular broad-based benchmark, also saw a rise of 0.41%, with a trading volume of 27.47 billion yuan, making it the second highest in the market and the highest in the Shenzhen market. The ETF’s turnover rate reached 18.65%, the highest among its peers.

Sector-Wide Impacts

The defense sector, in particular, showed robust performance. The AVIC Shenyang Aircraft Co Ltd’s shares were part of a broader trend where defense stocks surged. The company’s stock performance was mirrored by other defense-related stocks, with significant gains observed across the board. The “National Brand Index,” which includes AVIC Shenyang Aircraft Co Ltd, rose by 0.22%, with the company’s shares climbing by 9.30%.

Investor Sentiment and Fund Flows

Investor sentiment towards defense stocks has been buoyed by the potential for increased demand from international markets, as evidenced by Pakistan’s recent arms purchase. This sentiment is reflected in the net inflow of funds into key stocks. For instance, Jianghuai Automobiles saw a net inflow exceeding 8 billion yuan, while AVIC Shenyang Aircraft Co Ltd experienced a net inflow of over 5 billion yuan.

ETF Performance

The rally in defense stocks also positively impacted related ETFs. Several aerospace and defense ETFs saw increases of over 2%, with the Wanjia National Aerospace and Aviation Industry ETF rising by 2.63%, and the Tianhong National Aerospace and Aviation Industry ETF by 2.46%.

Conclusion

The recent developments underscore the growing importance of the aerospace and defense sector in China’s industrial landscape. AVIC Shenyang Aircraft Co Ltd, with its strategic focus on advanced aircraft development and production, stands at the forefront of this sector’s growth, benefiting from both domestic and international demand for defense capabilities. As geopolitical dynamics continue to evolve, the company’s performance is likely to remain a key indicator of the sector’s health and prospects.