CITIC Securities has released a research report stating that the "Guidance on Optimizing Business Entry to Promote Satellite Communication Industry Development" explicitly proposes to "orderly promote the opening of satellite communication business." Combined with previous statements from the March 2025 Two Sessions government work report and the 2025 National Industrial and Information Technology Department Heads Symposium regarding satellite communication business entry work, the firm expects related business license issuance to be completed within the year. The report recommends prioritizing satellite operation service providers with potential to obtain business licenses, such as traditional telecommunications operators and leading low-orbit satellite operating enterprises. Additionally, focus should be placed on core supporting components in satellite manufacturing, navigation/remote sensing payloads, design and assembly enterprises, as well as satellite launch and ground equipment related companies.

Key points from CITIC Securities:

**Event Analysis** On September 8, 2025, the Ministry of Industry and Information Technology (MIIT) website reported that in accordance with the deployment requirements of the "Guidance on Optimizing Business Entry to Promote Satellite Communication Industry Development," the Ministry recently issued a satellite mobile communication business operating license to China United Network Communications Group Co., Ltd. (China Unicom). China Unicom can now legally conduct direct satellite-to-phone services and other businesses, deepening applications in emergency communications, maritime communications, remote area communications, and enriching communication services and product offerings.

**Satellite Communication Business Entry Work Expected to Advance in Batches and Levels** As the regulatory authority for communications, internet, and related industries, MIIT's Information and Communications Administration issues statutory operating licenses for specific communication services, internet information services, and radio applications. The core function is to regulate market entry in the communications and internet sectors, ensuring enterprises possess the technical capabilities and compliance qualifications to conduct related businesses, while safeguarding network security, user rights, and industry order.

Market entry serves as the foundation for industry development to achieve further advancement. In late August 2025, MIIT released the Guidance, proposing to "use optimized business entry as a guide to enrich application scenarios, cultivate technological industries, optimize resource supply, enhance governance capabilities, and fully unleash the development potential of China's satellite communication industry." The firm expects satellite communication industry license issuance to accelerate in the near term, with the first batch potentially involving major basic telecommunications service providers, leading central state-owned enterprises, and private satellite industry operators.

**Strategic Importance of Satellite Communication Industry with Clear Policy Direction** Low-orbit satellite internet offers advantages of short transmission latency, providing significant benefits in communication scenarios requiring high timeliness and reliability. This is particularly meaningful in next-generation communications, vehicle networking, Internet of Things, digital cities, remote sensing detection applications, and emergency scenarios such as natural disasters.

Satellite orbits and frequencies are non-renewable resources. Securing first-mover advantages and capturing orbit-frequency resources holds important strategic significance for the nation and represents a key factor affecting national network security. At the industry level, the GW constellation coordinated by China Satellite Network Group and the G60 Starlink plan jointly announced by nine cities including Shanghai and Hangzhou are accelerating progress.

While U.S. company Starlink maintains first-mover advantages, domestic satellite industry development still faces numerous bottlenecks, requiring further improvement of infrastructure construction and cost reduction through technological innovation and scale effects. The firm expects that under accelerated policy coordination, cost and technical bottlenecks in the satellite industry will be effectively overcome, with institutional mechanism improvements and infrastructure construction further accelerating.

**High-Frequency Launches Underway, Industry Inflection Point Imminent** Since the first launch of the satellite internet low-orbit 01 group on December 16, 2024, the GW constellation has launched 10 groups of low-orbit satellites as of August 27, 2025. Launch progress has significantly accelerated, particularly with consecutive launches of groups 05-10 since July 27.

Looking ahead to the second half of 2025, the firm believes an industry inflection point has arrived, especially as supply chain bottlenecks in rocket capacity and launch costs may be resolved. Private companies are expected to develop recoverable medium-lift launch vehicles comparable to Falcon 9 in the next phase.

According to official websites and WeChat accounts of various private rocket companies, several plan to conduct maiden flights of medium-lift launch vehicles in the second half of 2025, including Tianbing Technology's Tianlong-3, Galactic Energy's Ceres-1, LandSpace's Zhuque-3, and CAS Space's Lijian-2. 2025 will be a critical juncture for Chinese commercial rocket technology breakthroughs. If private aerospace companies succeed in rocket tests, they may participate in launch services for GW and Qianfan constellations, further accelerating China's satellite internet constellation construction.

**Enterprise Level: China Unicom Receives Satellite Mobile Communication Business License with Solid Fundamentals** After obtaining the business operating license, China Unicom can legally conduct direct satellite-to-phone services and other businesses, deepening applications in emergency communications, maritime communications, and remote area communications while enriching communication services and product offerings. The firm is optimistic about the company's strategic emerging industries contributing new momentum for high-quality development.

From a fundamental perspective, the company's network communication business shows steady progress with further consolidated market position, while computing network digital intelligence business demonstrates both volume and quality growth with strong computing power service momentum. Currently, the company shows significant cost control achievements with improving cash flow. The firm believes the company takes positive measures in balancing short-term operations with long-term development, potentially creating sustained and stable returns for shareholders.

**Risk Factors:** Satellite industry license issuance pace below expectations; industry infrastructure construction below expectations; technical bottlenecks leading to cost optimization below expectations; intensified overseas industry competition causing domestic industry advancement below expectations.