China Aerospace Stock Slump 2026: Market Tumbles on 'Irrational' Rally Warnings

The rockets are staying on the ground for now. After a meteoric rise that saw some shares surge by as much as 135%, China’s commercial aerospace sector is facing a harsh reality check as companies themselves sound the alarm on speculative fever.

Inside the China Aerospace Stock Slump 2026

On January 13, 2026, shares of Hunan Aerospace Huanyu plummeted by up to 20%, while China Spacesat dropped 10% before staging a slight recovery. According to Bloomberg, the sell-off was triggered by a wave of regulatory-adjacent warnings from the companies themselves, cautioning that recent gains had far outpaced their underlying fundamentals.

Fu Zhifeng, chief investment officer at Shanghai Chengzhou Investment Management, noted that while the industry's long-term prospects remain promising, the short-term market is "mainly driven by speculative sentiment." He suggested that regulators are actively trying to cool down the market's overheated enthusiasm.

Speculation Outpaces Policy Gains

Since early December 2025, aerospace stocks have decoupled from the broader market. The onshore benchmark CSI 300 Index advanced only 5% during the same period that China Satellite Communications soared by over 135%. This massive gap led firms like Geovis Technology to urge investors to exercise "prudent investment judgment" amid risks of irrational speculation.