China has planned to launch over 25,000 satellites under initiatives like the GW and Qianfan constellations, with commercial aerospace—designated as a key national priority for fostering new productive forces—now entering a rapid deployment phase after years of preparation.

In terms of cost reduction, the U.S. holds an early-mover advantage in satellite platform scaling, resulting in lower platform costs. However, as China achieves mass production, it is expected to narrow this gap, shifting focus toward payload manufacturing. The growing demand for low-Earth orbit (LEO) communication satellites will also create opportunities for high-value components in satellite production. Guotai Haitong Securities outlines the following key insights:

**Accelerated Satellite Internet Deployment Amid Space Resource Competition** Space resources have become a strategic battleground, with China and the U.S. emerging as the only two competitive players under the "first-come, first-served" rule. Globally, there are 15,621 operational satellites, of which the U.S. accounts for 10,490 (two-thirds), Russia 1,577, and China 951. SpaceX’s Starlink, the world’s largest satellite network operator, has surpassed 10,000 in-orbit satellites as of October 2025, achieving a closed-loop business model and profitability.

Satellite internet, characterized by high technology intensity, heavy capital investment, and vast application scenarios, is poised to become a duopoly between China and the U.S., driven by their R&D capabilities, economic scale, and market demand. China’s ambitious plans, including the GW and Qianfan constellations, signal its transition into a rapid deployment phase.

**LEO Communication Satellites: The Future of Satellite Internet** Direct satellite-to-phone connectivity and other innovations are scaling, with satellite communication users exceeding 10 million. As D2C (direct-to-cell) technology matures, billions of smartphones worldwide could serve as potential terminals. Leading manufacturers like Apple and Huawei have already integrated satellite communication features into premium models.

High-throughput satellites (HTS) in LEO, leveraging multi-beam and frequency reuse technologies, offer capacities tens to hundreds of times greater than traditional satellites—from below 10 Gbit/s to over 100 Gbit/s—with average speeds comparable to 4G. Starlink’s coverage of 100+ countries and 7 million active users demonstrates the sector’s viability.

**China’s Commercial Aerospace Enters a New Era** Since launching its first satellite, Dongfanghong-1, in 1970, China has built a robust aerospace ecosystem. The rise of private players like SpaceX in the 21st century has spurred China’s shift from state-led to market-driven satellite manufacturing. Today, a hybrid ecosystem—combining state-owned entities like China Satellite (under the Fifth Academy) with private firms such as Shanghai Yuanxin, Galaxy Space, Changguang Satellite, and MN Space—is advancing LEO constellation development.

**Cost Reduction and Technological Advancements** Elon Musk claims Starlink’s per-satellite manufacturing cost has fallen below $500,000, validating its commercial feasibility. While the U.S. leads in platform cost efficiency, China’s scaling efforts aim to reduce platform costs and prioritize payload investments. Key components in satellite manufacturing, such as phased-array antennas, laser inter-satellite links, electric propulsion, and flexible solar arrays, stand to benefit from rising LEO demand.

**Investment Recommendations** Focus on satellite internet operators with licensing and scale advantages, manufacturers capitalizing on China’s deployment boom, and high-value component suppliers.

**Risks** Potential delays in satellite network deployment, slower-than-expected cost reductions, and underwhelming in-orbit performance or technical validation.