Guoyuan Securities released a research report stating that significant optimization in launch capacity and cost reductions have driven continuous declines in per-bit transmission costs, accelerating constellation deployment. This is expected to indirectly enhance system efficiency in satellite operations and spur downstream service applications. The firm recommends focusing on leading suppliers of satellite payload manufacturing and navigation modules.
Key insights from Guoyuan Securities include:
**LEO Satellite Communication Enters Critical Phase of Large-Scale Deployment and Commercialization** Amid accelerating global digitalization, inherent coverage gaps in terrestrial networks, and emerging applications (such as low-altitude economy, maritime communications, emergency response, and IoT connectivity), LEO satellites have become a core pillar of next-generation integrated space-ground infrastructure due to their low latency, high bandwidth, wide coverage, and reduced reliance on ground stations. Major international constellations like Starlink, OneWeb, and Kuiper are now in large-scale deployment, while China has included satellite internet in its "new infrastructure" initiative, emphasizing the development of self-sufficient LEO systems.
**Technological Advancements Boost Efficiency and Reduce Costs** Enhanced onboard processing (OBP) capabilities improve data routing and computing functions, reducing ground station dependency. The maturity of phased-array antenna technology has significantly upgraded user terminal performance and portability. Meanwhile, reusable rockets have alleviated launch bottlenecks, driving down per-bit transmission costs and enabling economically viable mass adoption.
**Policy Support Accelerates Industry Growth** China's 15th Five-Year Plan highlights the need to cultivate emerging industries like the low-altitude economy, with LEO constellations serving as the network backbone. Satellite internet was designated as one of seven key "new infrastructure" sectors in the 14th Five-Year Plan for ICT development (2021). Subsequent policies from the MIIT and CNSA have streamlined spectrum allocation, standardization, and licensing, providing clear growth pathways for the industry.
**Supply Chain Dynamics Favor Manufacturing and Services** While ground equipment currently dominates global satellite industry revenue, advancements in inter-satellite links and OBP are expected to reduce reliance on ground stations, lowering operational costs. This shift may elevate the revenue share of satellite manufacturing and services, particularly for consumer broadband/IoT terminals and industrial communication devices. Domestic firms with core R&D and mass-production capabilities stand to benefit.
**Risk Factors** Macroeconomic volatility, mismatches between constellation deployment timelines and commercial returns, and pricing risks from competitive bidding processes remain key challenges.
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