China Securities Co., Ltd. released a research report stating that the recent successful launch and recovery of the Long March 10B carrier rocket marks a historic breakthrough for China in reusable rocket technology. This mission, conducted at the Hainan Commercial Space Launch Site, represents China's first successful controlled recovery of a rocket's first stage and the world's first net-based recovery of a carrier rocket. From an industrial progress perspective, China's reusable rockets have completed the critical leap from concept to engineering reality, which is expected to bring deep supply-side transformation to industries such as low-earth orbit satellite internet. The future normalization of rocket recovery is anticipated to drastically accelerate the deployment pace of large constellations like China SatNet's GW and Yuanxin's Qianfan, while significantly reducing construction cost pressures.
On July 10th at 12:15, the Long March 10B carrier rocket lifted off from the Hainan Commercial Space Launch Site, successfully placing its satellite payload into the predetermined orbit. Approximately six minutes after stage separation, the first stage performed a vertical return and was successfully recovered on a sea-based platform via a net capture system, marking a complete success for both the launch and recovery mission. This achievement signifies China's first successful controlled recovery of a rocket's first stage and the world's inaugural net-based recovery of a carrier rocket, representing a historic breakthrough in reusable rocket technology. It lays a solid foundation for accelerating the enhancement of China's space access capabilities.
The Long March 10B has become China's first reusable launch vehicle to successfully demonstrate recovery. Developed under the leadership of the China Academy of Launch Vehicle Technology, a subsidiary of the China Aerospace Science and Technology Corporation, it is a large two-stage liquid-fueled rocket with a 5-meter diameter. The core first stage retains the configuration of the Long March 10A's first stage, utilizing liquid oxygen/kerosene propellant, while the second stage uses liquid oxygen/methane propellant. The rocket has a liftoff thrust of approximately 890 tons, a liftoff mass of about 760 tons, and an overall length of roughly 63 meters for this maiden flight. In its reusable configuration, its low-earth orbit payload capacity is 16 tons, capable of meeting various mission requirements such as low-earth orbit satellite internet constellation deployment and large commercial satellite launches.
Following this, the Long March 10B development team will continue optimizing rocket performance and accelerate the iterative upgrade of reusable rocket technology. The first re-flight of a recovered first-stage rocket is anticipated before the end of this year. Previously, mainstream global rocket recovery methods relied on landing leg and powered-descent technology, a mature path but one with inherent limitations such as structural redundancy in the rocket body, stringent landing precision requirements, and constrained recovery scenarios. China's space sector has chosen the differentiated path of net-based recovery, representing a system-level innovation.
The most direct value of net-based recovery is achieving weight reduction and efficiency gains in the rocket's structure. By eliminating the complex landing leg mechanism, the structural weight of the first stage is significantly reduced, directly translating into greater payload capacity. The Long March 10B's reusable payload capacity exceeding 16 tons to low-earth orbit gives it a payload advantage among reusable rockets of its class, enabling more satellites per launch and shortening constellation deployment timelines.
From an industry progress standpoint, China's reusable rockets have completed the critical transition from design to engineering. This is expected to bring profound supply-side changes to industries like low-earth orbit satellite internet. The future normalization of rocket recovery is poised to dramatically accelerate the deployment speed of large constellations such as China SatNet's GW and Yuanxin's Qianfan, while substantially lowering construction cost pressures.
In December last year, the Zhuque-3 and Long March 12A rockets achieved successful maiden orbital flights with significant breakthroughs in first-stage recovery. In February this year, a Long March 11 first stage successfully performed a splashdown at sea. In March, the Lijian-2 rocket succeeded in its maiden orbital flight. By 2026, multiple large liquid-fueled rockets from private and state-owned entities, comparable to the Falcon 9, are expected to conduct dense maiden flight and recovery tests. The continuous expansion of launch pads and the significant shortening of turnaround cycles are expected to gradually resolve industry bottlenecks. In the near to medium term, this will greatly accelerate China's constellation construction, and in the long term, it will spur the emergence of applications like space tourism and space transportation.
Looking at subsequent catalysts, momentum is building both in China and the US, with intensive industry catalysts expected domestically and internationally. Multiple Chinese launch vehicle models are set to continue maiden flight and recovery tests, with the aim of achieving a first-stage re-flight within this year. IPOs for commercial space companies are steadily progressing across key segments like satellites, rockets, launch sites, ground systems, and applications, with leading rocket companies potentially listing within the year. Coupled with the global demonstration effect from SpaceX's anticipated public listing, the golden development period for commercial space has arrived.
With intensive catalysts in the commercial space sector and as market risk appetite recovers, the outlook for the commercial space segment is positive. Within the satellite segment, focus areas include payload integration, antennas and related components, laser communication terminals and supporting systems, and solar arrays/energy systems. For the rocket segment, key areas are engines and their 3D printing, and rocket structural components. In ground equipment, focus on civil terminals and direct-to-cell phone connectivity. For operation and services, attention should be on companies possessing scarce operational licenses.
Key Risk Factors
Defense budget growth falling short of expectations: While defense budgets have maintained relatively stable growth in recent years with favorable policies, there remains the possibility of reduced defense expenditure due to changes in national policy or strategy.
Delays in weapons and equipment delivery: In the post-pandemic era, compounded by regional tensions, global economic and trade links have faced significant disruptions. Industries like shipbuilding face risks of construction delays and postponed deliveries.
Slower-than-expected progress in related reforms: The nation's assessment of future trends and its guiding principles determine the industry's development prospects. National macroeconomic and industrial policies significantly influence the strategic direction, industry choices, and investment/merger directions of defense enterprises.
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