A research report from CITIC SEC indicates that Amazon's planned acquisition of Globalstar is expected to be finalized, while SpaceX is increasing its investment in space-based computing capabilities. These developments signal an acceleration in the global commercial space race. Concurrently, domestic progress in reusable rocket technology is anticipated to reach a significant milestone. The commercial space sector benefits from strong policy support, significant Sino-US synergies, and powerful industry trends. A breakthrough in China's reusable rocket technology is projected within the year, which is likely to further hasten industrial development. The firm maintains a positive long-term outlook on the industry, suggesting that investment focus should be directed towards core assets, identifying segments with pricing power and new growth avenues. Key investment areas include: 1) Reusable Rockets: emphasizing the 3D printing supply chain; 2) Satellites: focusing on phased array antennas, inter-satellite laser communication, and solar arrays; 3) Terminals; and 4) the SpaceX-related supply chain. CITIC SEC's primary views are outlined below.
Amazon's potential acquisition of Globalstar is poised to accelerate its low-earth orbit (LEO) communications business. Reports indicate that Amazon announced on April 14th its intention to acquire satellite operator Globalstar for $90 per share, valuing the transaction at approximately $11.57 billion. The deal will be submitted for review by the U.S. Federal Communications Commission, which is reportedly very receptive to the Amazon-Globalstar transaction. Globalstar currently operates 24 in-orbit satellites and has a 54-satellite expansion plan backed by Apple. It holds global spectrum usage rights for L/S-band, Band 53/N53, and C-band. The N53 spectrum is particularly strategic, as it is core for Direct-to-Device (D2D) communication for devices like mobile phones and has already received licenses in multiple countries. Furthermore, Amazon has signed an agreement with Apple, an existing Globalstar client, to support satellite communication features on Apple devices using Amazon's proposed "Amazon Leo" network. While Amazon Leo is initially focused on broadband LEO satellite internet, the successful acquisition of Globalstar is seen as a way for Amazon to rapidly supplement its capabilities with D2D narrowband direct connectivity, secure a major client in Apple, achieve a competitive leapfrog, and accelerate its efforts to catch up with Starlink.
SpaceX is intensifying its focus on space-based computing, contributing to the faster pace of the global commercial space competition. SpaceX has recently accelerated its commercial space initiatives in several areas: 1) LEO Communication Satellites: By April 14th, SpaceX had launched over 1,000 LEO communication satellites into orbit in 2026, a pace that exceeds its 2025 launch rate. The company now has over ten thousand LEO communication satellites operational. 2) Space Computing: Tesla's self-built chip factory, the Terafab project, is set to be located in Austin. This project aims to produce over 1 terawatt of computing capacity annually (encompassing logic, memory, and packaging), with approximately 80% designated for space applications and 20% for terrestrial use, thereby supporting SpaceX's space computing ambitions. 3) Starship: Elon Musk stated on platform X on April 3rd that the Starship V3 is scheduled for its maiden flight within 4-6 weeks. 4) IPO: SpaceX has confidentially submitted an application for an initial public offering, seeking a valuation of $2 trillion, with the public prospectus expected by the end of May. The firm observes that SpaceX's commercial space strategy is comprehensively accelerating. The gradual maturation of the Starship V3 iteration is particularly noteworthy, as it holds the potential to unlock the vast market for space-based computing, which far surpasses the scope of satellite internet.
Domestically, new rocket models are undergoing frequent launches, and a breakthrough in reusable technology appears imminent. Since March, China's commercial rocket sector has seen a dense schedule of launches for new models. The Zhongke Aerospace "Li Jian-2" rocket, China's first launch vehicle utilizing a Common Booster Core (CBC) configuration, successfully completed its maiden flight on March 30th. It is expected to become one of the primary launch vehicles for China's future large-scale satellite constellation deployments. Although launches of other rockets, such as the Tianlong-3, have encountered setbacks, drawing parallels with the iterative development process of SpaceX's main rocket models, the firm suggests that commercial rocketry is, in a sense, an experimental science. Failures contribute valuable experience for rapid iteration. Under China's aerospace quality management system, which emphasizes learning from incidents across the industry, the sharing of lessons from failures can foster more efficient technological progress industry-wide. It is plausible that one entity in China's commercial space sector will achieve a breakthrough in reusable technology, followed by successive breakthroughs from others, leading to a rapid transition from a single leader to a diverse and flourishing ecosystem. Reports suggest that the Long March 10B rocket is scheduled for launch in the near future. Combined with the successful completion of the Long March 10A's海上溅落试验 in February, this model may achieve a breakthrough in reusability. Subsequent models from other state-owned and private rocket companies are also highly anticipated.
Risk factors include potential slower-than-expected development of China's satellite internet constellations, delays in the construction of China's space computing constellations, setbacks in the execution of domestic satellite launch plans, slower progress in building ground infrastructure and operational services for satellites, a slower-than-anticipated pace of China's commercial space development, and the possibility of faster technological breakthroughs in foreign satellite launch capabilities.
Comments