Huachuang Securities notes that satellite internet systems, characterized by wide coverage, low latency, high bandwidth, and low cost, have become a key development focus in the communications sector. The commercial space industry has established four primary profit models: launch services, satellite manufacturing, operational services, and data & APIs. The finite capacity for satellites in Earth's low Earth orbit (LEO) is accelerating a global race to secure orbital slots. This dynamic is driving rapid growth in related industries such as rocket launches and satellite manufacturing, presenting investment opportunities across the supply chain.
The Vast Frontier of Commercial Space: A New Era Begins with Global Momentum
Downstream applications for commercial space include satellite communications, navigation, and remote sensing. In communications, SpaceX has already achieved significant scale, with over 9,000 operational Starlink satellites projected for 2025 and a user base reaching 9 million. SpaceX's revenue is expected to surpass $18.5 billion in 2025. Commercially, satellites are categorized by orbit: low Earth orbit (LEO), medium Earth orbit (MEO), and geostationary orbit (GEO). LEO satellites are particularly well-suited for commercial development due to advantages like low transmission latency, minimal link loss, flexible launch options, diverse application scenarios, and lower overall manufacturing costs. They are widely used in key downstream areas like communications.
Data from CCID Consulting indicates Earth's LEO can accommodate approximately 60,000 satellites. The Ku and Ka communication frequency bands primarily used by LEO satellites are also nearing saturation. According to Space International, by the end of 2024, there were 11,605 operational spacecraft globally. The United States led with 8,813, accounting for 75.9% of the total, while China ranked second with 1,094, representing 9.4% of the global fleet. In terms of new launches in 2024, a total of 2,873 spacecraft were launched worldwide. The U.S. was first with 2,269 launches, while China launched 105 satellites, including those for the "Qianfan" constellation. Orbital slots and frequency bands, as prerequisites for functional communication satellites, have become critical resources fiercely contested by satellite companies worldwide.
Scale Arrives for the Space Economy, Fueled by Cost Optimization and Technological Advancement
The commercial space industry revolution began in the 2010s, led by U.S. private aerospace companies like SpaceX through technological breakthroughs and business model innovation. Currently, China and the United States, leveraging mature technologies and robust supply chains, successfully hold nearly 80% of the global commercial space market share. The industry has solidified its four main profit models.
1) Rocket Launches: The launch phase is a core factor constraining the efficiency and cost of building LEO satellite systems. Rocket costs remain high, with the primary method for cost control being rocket recovery technology. Reusable rockets, by recovering and refurbishing core components like the first stage and fairing for repeated use, significantly reduce launch costs. They enable a virtuous cycle: lower transportation costs lead to more satellite launches, which in turn drives down satellite costs.
2) Satellite Manufacturing: A satellite bus is the integrated assembly of all service systems that support and ensure the payload's normal operation. Based on physical composition and function, it comprises subsystems like the payload, structure, thermal control, attitude control, propulsion, power supply and distribution, telemetry & command, and data management. Solar arrays effectively harness solar energy to provide continuous power. Flexible solar arrays use ultra-thin flexible substrates, typically under 0.5mm thick, reducing weight by 20%–40% for the same area. Their solar cell conversion efficiency exceeds 30%, and their stowed volume can be over 60% smaller than traditional rigid arrays, while their deployed area can be 1.5 times larger or more. This design not only significantly cuts launch costs but also frees up fairing space, enhancing satellite design flexibility and on-orbit power capacity. From an industry development perspective, flexible solar arrays represent not merely an incremental "lightweight replacement" but a necessary evolution to meet the explosive growth in satellite power demands.
3) Ground Segment Equipment: Satellite ground equipment is a vital component of satellite systems, ensuring normal operation and enabling applications like communication, navigation, and remote sensing. To date, industry leader SpaceX's Starlink system covers over 150 countries across the Americas, Europe, Asia, and Africa, serving more than 9 million users globally. It connects large-scale satellite networks with ground terminals to deliver high-speed broadband to remote and traditionally underserved areas worldwide. Concurrently, domestic manufacturers are actively expanding their presence, engaging with leading global and domestic industry players and accumulating technical expertise.
Risks include potential shortfalls in technology R&D and iteration, launch capacity not meeting expectations, and intensifying industry competition.