The commercial space industry, bolstered by national policy support and technological breakthroughs, is on the cusp of a new epoch. Key information technology segments within the commercial space industry include (1) remote sensing and its applications; (2) satellite measurement, operation, and control systems; (3) CAE simulation/satellite testing; and (4) interplanetary transmission processing modules, communication modules, and data processing platforms. In terms of new application scenarios, attention should be paid to space-based computing power. Furthermore, we believe the current development phase of commercial space represents a period of synergy between state-owned and private enterprises. Examining the development trajectories of overseas commercial space industries reveals that success hinges on the synergistic drive of policy, technology, and business models. The United States achieved a radical transition from state dominance to full privatization of low-Earth orbit through legislative safeguards, substantial NASA procurement contracts, and regulatory easing. Europe, leveraging the ESA to integrate resources, explores an integrated market model. Technologically, cost-reduction and efficiency-enhancing technologies, such as reusable rockets, modular satellite manufacturing, and in-orbit servicing, are central to industrial scaling. Regarding business models, SpaceX has achieved profitability through a full-industry-chain closed loop, while companies like Planet Labs generate stable cash flow through standardized data subscription services. Benchmarking against international counterparts, China's commercial space development requires strengthened legislative and procurement support in policy, leveraging manufacturing advantages to overcome cost-reduction challenges like reusable rockets in technology, and utilizing capital market empowerment to accelerate industrial chain maturation and ecosystem building. CSC's defense, computer, and communication teams have launched a series of research reports on the [Commercial Space Industry Chain]: In late 2025, China's space activities remained highly active. On December 26, the Long March 8A carrier rocket lifted off from the Hainan Commercial Space Launch Site, successfully deploying 17 sets of low-orbit satellites for the satellite internet constellation into their intended orbits. For this mission, the rocket test team focused on user requirements, further optimized the rocket's configuration, deeply tapped its payload capacity, significantly increased the satellite insertion altitude, and effectively reduced satellite fuel consumption. While ensuring mission reliability and safety, they systematically optimized the vertical testing area procedures at the launch site, significantly enhancing launch efficiency through parallel testing and process consolidation. On December 31, the Long March 7A carrier rocket launched from the Wenchang Space Launch Site in China, successfully placing the Shijian-29 A and B satellites into their predetermined orbits. The Shijian-29 satellites are primarily used for new technology verification experiments in space object detection. The A satellite was developed under the leadership of the Eighth Academy of China Aerospace Science and Technology Corporation (CASC), while the Long March 7A rocket was developed by the First Academy of CASC. In 2025, the Long March 7A rocket conducted 6 launch missions, setting a record for annual launches for this rocket type. Currently, the rocket's technical status and management processes are mature and stable, with launch site procedures compressed to 19 days, further meeting future high-density launch demands. With the completion of this mission, CASC concluded its annual launch schedule successfully. In 2025, launch vehicles developed by CASC completed 73 space launch missions, a new historical record. We assess that China's defense industry has evolved from a past reliance on单一domestic demand to a new tripartite development pattern, characterized by more diverse and sustainable growth drivers. The pattern of "domestic demand as the foundation, export expansion, and civilian application feedback" is profoundly reshaping the landscape and boundaries of China's defense industry. The sector is transitioning from "cyclical growth" to "comprehensive growth." First curve - Domestic defense demand (the foundation): Focused on "preparing for potential conflicts" and equipment modernization, demand stems from stable growth in defense budgets and equipment upgrades (e.g., mass production of key models during the "14th Five-Year Plan" period). Key growth directions include high-end deterrence capabilities and systematic, unmanned, low-cost systems. Second curve - Defense exports (new engine): Leveraging cost-performance advantages, systematic operational capabilities, and geo-strategic cooperation (e.g., Belt and Road Initiative), China's share of the global arms trade continues to rise, positioning it as a major global supplier and achieving a win-win in strategic influence and economic benefits. Third curve - Militarized technology civilian application (new frontier): Spillover of cutting-edge defense technologies into civilian sectors is spawning trillion-yuan industries like commercial space, low-altitude economy, future energy, deep-sea technology, and large aircraft, driving the development of new processes, materials, and components, forming a virtuous cycle of "military tech for civilian use, feedback to defense." Risk Analysis Defense budget growth falling short of expectations; Weapons and equipment delivery delays; Slower-than-expected progress in related reforms. Report Source Securities Research Report Title: "Space Launches Conclude Successfully for the Year, Continued Optimism for Phased Opportunities in Commercial Space" Release Date: January 3, 2026 Issuing Institution: China Securities Co., Ltd. The commercial space industry, supported by national policies and technological breakthroughs, is poised to enter a new era. Key informatization segments include remote sensing, satellite TT&C, CAE simulation/testing, and interplanetary communication/data processing modules. New scenarios focus on space computing power. We view the current phase as a resonance cycle between SOEs and private firms. The goal of building a space power is accelerating the development of the commercial space industry. During the "14th Five-Year Plan" period, China explicitly advocated for guiding commercial space development. Looking ahead to the "15th Five-Year Plan," policy support is expected to evolve towards rule-setting and guiding frontier exploration. In November 2025, the CNSA established a Commercial Space Department and released an action plan targeting 2027 for industrial scale expansion and ecosystem development. Space industry informatization involves remote sensing, flight control, simulation/testing, etc. Remote sensing is a major field due to its wide applications. Intelligent satellite flight control is crucial for safety and efficiency. CAE technology is vital throughout product lifecycles. Space computing power is emerging as a new application scenario, complementing ground-based computing. Elon Musk proposed 100 GW annual space AI data centers as a low-cost path for large-scale AI. Google's Project Suncatcher plans orbital experiments with TPU-equipped satellites. Space computing addresses challenges like power consumption and land use associated with terrestrial data centers, showing commercial potential. Risk Warnings Macroeconomic downturn risk; Accounts receivable bad debt risk; Intensifying industry competition; Policy/technology advancement falling short of expectations. Report Source Securities Research Report Title: "Commercial Space In-Depth Report: Stars as the Path, Navigating a New Epoch" Release Date: December 15, 2025 Issuing Institution: China Securities Co., Ltd. The success of overseas commercial space industries hinges on policy, technology, and business model synergy. The US transitioned to LEO privatization via legislation and NASA contracts. Europe uses ESA for an integrated market. Reusable rockets and modular satellites are key technologies. SpaceX's integrated model and Planet Labs' data subscriptions are successful business models. China needs policy support, technological cost reduction, and capital market empowerment. Overseas commercial space has formed clear development patterns. The US used legislation and NASA programs to foster companies like SpaceX. Europe emphasizes coordination via ESA. Russia focuses on state-led constellations, while India is opening to private capital. These models drive global scaling. Technological breakthroughs are core to cost reduction and commercial viability. Reusable rocket technologies have significantly lowered launch costs. Modular satellites enable rapid deployment. In-orbit servicing is growing, ensuring sustainable space operations. Overseas models validate sustainable business approaches. SpaceX leveraged government contracts to build Starlink. Planet Labs provides standardized data subscriptions. China should accelerate its ecosystem through policy, technology, and capital. Risk Warnings Macroeconomic downturn risk; Accounts receivable bad debt risk; Intensifying industry competition; Policy/technology advancement falling short of expectations. Report Source Securities Research Report Title: "Commercial Space Series Report 2: Examining the Development Path of Overseas Commercial Space" Release Date: January 3, 2026 Issuing Institution: China Securities Co., Ltd. Commercial Space: Multiple launch missions, including the Long March 12A, were largely successful this week (Dec 22-28, 2025), with annual launch totals reaching new highs. Globally, 7 of 9 scheduled launches occurred, with 5 successes (including China's LM-12A and LM-8A) and 2 failures (Japan, South Korea). The LM-12A launch on Dec 23 saw an anomaly during first-stage re-entry ignition, preventing successful recovery. For the full year 2025, global launches are expected to exceed 340, a significant increase from 2024's 263, with China contributing over 90 launches, indicating intense global competition. Record launch numbers reflect sustained national and local support for commercial space. At the 3rd Commercial Space Development Conference in Beijing, the Commercial Space Industry Alliance Science and Technology Fund was launched, initially sized at 1-2 billion yuan, targeting LEO constellations, reusable launchers, new materials, and space resource utilization. Shanghai issued measures to support the aerospace industry in the G60 Sci-Tech Innovation Corridor, offering up to 50 million yuan in funding for key projects and rewards for related services and licenses. Commercial space is now included in the STAR Market's fifth listing standard, which focuses on core technology rather than revenue/profit. The SSE issued guidelines detailing requirements for commercial rocket companies using this standard, including mastering key technologies and achieving a successful orbital launch with reusable technology. Leading companies like Landspace are progressing towards IPOs. These measures provide a clear capital market path and support industry development. Risk Warnings Macroeconomic downturn risk; Accounts receivable bad debt risk; Intensifying industry competition; Impact of international environment changes. Report Source Securities Research Report Title: "Emphasizing Commercial Space + Digital Currency" Release Date: December 28, 2025 Issuing Institution: China Securities Co., Ltd. China successfully launched 16 sets of low-orbit internet satellites; Wenchang International Aerospace City's satellite super factory (1,000 units/year capacity) is nearing operation; SpaceX is advancing its IPO plans. Continued attention is recommended for related investment opportunities in commercial space. This week (Dec 8-14, 2025), China successfully launched the satellites from the Hainan Commercial Space Launch Site; the Wenchang factory promises "launch upon出厂"; SpaceX's IPO valuation target is around $1.5 trillion. Recent CNSA action plans promote high-quality, safe development. Continued focus on commercial space investment opportunities is advised. Risk Warnings International environment impacts on supply chains and overseas expansion; Tariff effects; Slower-than-expected AI development affecting cloud demand; Market competition squeezing margins; Exchange rate fluctuations; Slower progress in digital economy/China construction; Slower cloud business development by telcos/cloud providers; Lower-than-expected capex; Weaker demand for communication modules/controllers. Report Source Securities Research Report Title: "Continued Recommendation of AI Computing Sector, Attention on Quantum Computing and Commercial Space Industry Chain" Release Date: December 14, 2025 Issuing Institution: China Securities Co., Ltd.
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