An artificial satellite typically comprises a satellite support system and a satellite payload. The payload encompasses the specialized instruments, equipment, or subsystems deployed to carry out the satellite's mission once it reaches orbit. The support system includes all satellite components except the payload, acting as the foundational and universal module of the satellite.

The Chinese commercial spaceflight market is expected to surpass RMB 2.5 trillion by 2025, encompassing the entire industrial chain. The satellite manufacturing sector is projected to reach RMB 80 billion in 2025 and escalate to RMB 250 billion by 2030, boasting a Compound Annual Growth Rate (CAGR) exceeding 25%.

Breakdown of Each Segment in the Commercial Spaceflight and Artificial Satellite Industrial Chain

Upstream: Satellite Manufacturing

Core Components: These form a significant portion of satellite costs, with T/R chips, gallium arsenide batteries, and star trackers being pivotal. Chengdu Microwave Technology's satellite-borne phased array T/R chips command over 80% of the market share. Unity Opto's gallium arsenide batteries achieve a conversion efficiency of 32%. Tianyin Electromechanical's star trackers hold a 30% share in the global market.

Satellite Platform and Payload: The platform functions as the satellite's "body," managing propulsion, attitude control, etc. The payload, serving as the "functional core," accounts for 70% of the cost in mass-produced satellites. China Satellite stands as the sole listed entity for complete satellite manufacturing in China, handling 60% of the StarNet constellation's orders.

Assembly, Integration, and Testing (AIT): Modular and batch production of satellites represent the prevailing trend. China Satellite's megafactory plans an annual capacity of 1,000 satellites, while Galaxy Space has reduced the cost of individual satellites to around RMB 10 million.

Midstream: Launch and In-Orbit Operations & Maintenance

Launch Services: The Long March series rockets form the backbone of the national team, while private rocket companies like LandSpace focus on liquid oxygen-methane reusable rockets, exemplified by the Zhuque-3. Sirui New Materials supplies engine materials capable of withstanding temperatures exceeding 2,000℃.

In-Orbit Operations & Maintenance: This includes satellite telemetry, track, and command (TT&C), orbit management, fault repair, etc. Firms like StarMap Measurement & Control provide satellite in-orbit TT&C and data reception services to ensure stable satellite operations.

Downstream: Applications and Services

Traditional Applications: Satellite communication (with Shanghai Hanxin holding over 30% of the market share), satellite navigation (centered around Beidou Navigation), and satellite remote sensing (with Aerospace Information processing remote sensing data services) constitute the mainstream scenarios.

Emerging Applications: The advent of direct-to-smartphone satellite technology has become a reality. Holleytech, the sole mass producer of Tiantong satellite baseband chips, collaborates with Huawei to drive consumer-grade applications. Low Earth orbit (LEO) satellite internet has emerged as the focal point for StarNet and the G60 constellation.

Profitability of Companies in the Commercial Spaceflight and Artificial Satellite Industrial Chain

Company profitability generally reflects the volume and quality of earnings over a specific period. Analyzing profitability entails a thorough examination of a company's profit margins.

This article, part of the Enterprise Value Series' [Profitability] installment, selects 46 companies from the commercial spaceflight and artificial satellite industrial chain as research samples, utilizing return on equity (ROE), gross profit margin, and net profit margin as evaluation metrics.

Data is based on historical performance and does not predict future trends; it is intended solely for static analysis and does not constitute investment advice.

No. 10 Shenglu Communication

Industry Segment: Military Electronics

Profitability: ROE of -26.42%, gross profit margin of 33.32%, net profit margin of -69.29%

Performance Forecast: The highest ROE in the past three years was 8.18%, with the latest forecast averaging 5.90%

Main Products: Microwave electronics as the primary revenue source, accounting for 43.27% of income, with a gross profit margin of 41.25%

Company Highlights: Shenglu Communication's active phased array satellite internet antennas and up/down conversion components are suitable for low Earth orbit satellite communication.

No. 9 Aerospace Universe

Industry Segment: Aerospace Equipment

Profitability: ROE of 6.19%, gross profit margin of 43.67%, net profit margin of 21.96%

Performance Forecast: ROE has continuously declined to 6.19% over the past three years, with the latest forecast averaging 6.07%

Main Products: Aerospace process equipment as the primary revenue source, accounting for 44.65% of income, with a gross profit margin of 40.71%

Company Highlights: Aerospace Universe has participated in the research, development, and production of various satellite-borne antennas and microwave passive products, including satellite-borne mechanically movable antennas, fixed reflector antennas, and phased array antennas.

No. 8 Longxi Co., Ltd.

Industry Segment: Metal Products

Profitability: ROE of 5.12%, gross profit margin of 22.22%, net profit margin of 8.04%

Performance Forecast: The highest ROE in the past three years was 7.27%, with the latest forecast averaging 6.65%

Main Products: Bearing products as the primary revenue source, accounting for 50.87% of income, with a gross profit margin of 40.51%

Company Highlights: Longxi Co., Ltd.'s main products, joint bearings, are primarily used in construction machinery, heavy-duty trucks, and aerospace.

No. 7 BMGC

Industry Segment: Aviation Equipment

Profitability: ROE of 0.62%, gross profit margin of 52.83%, net profit margin of 3.69%

Performance Forecast: The highest ROE in the past three years was 12.17%, with the latest forecast averaging 7.55%

Main Products: Inspection and testing as the primary revenue source, accounting for 38.96% of income, with a gross profit margin of 63.46%

Company Highlights: BMGC is a leading developer and manufacturer of landing gear systems and brake products for military aerospace vehicles, with applications in key military equipment such as aerospace high-altitude vehicles.

No. 6 Aerospace Precision

Industry Segment: Military Electronics

Profitability: ROE of 5.45%, gross profit margin of 38.34%, net profit margin of 8.04%

Performance Forecast: ROE has fluctuated between 5%-13% over the past three years, with the latest forecast averaging 7.78%

Main Products: Connectors and integrated interconnection products as the primary revenue source, accounting for 67.43% of income, with a gross profit margin of 38.68%

Company Highlights: Aerospace Precision is a leading enterprise in aerospace connectors, benefiting from the rapid growth in the number of aerospace launchers.

No. 5 Hollywave

Industry Segment: Military Electronics

Profitability: ROE of 2.21%, gross profit margin of 38.97%, net profit margin of 8.25%

Performance Forecast: ROE has continuously declined to 2.21% over the past three years, with the latest forecast averaging 3.82%

Main Products: Electromagnetic measurement system business as the primary revenue source, accounting for 87.23% of income, with a gross profit margin of 34.70%

Company Highlights: Hollywave's electromagnetic measurement system business for satellites has witnessed rapid order growth. The company will continue to deeply serve the measurement business needs of low Earth orbit satellites.

No. 4 Zhenlei Technology

Industry Segment: Analog Chip Design

Profitability: ROE of 0.84%, gross profit margin of 76.23%, net profit margin of 5.88%

Performance Forecast: The highest ROE in the past three years was 5.66%, with the latest forecast averaging 6.57%

Main Products: Power management chips as the primary revenue source, accounting for 40.43% of income, with a gross profit margin of 81.00%

Company Highlights: In the field of low Earth orbit satellite internet, Zhenlei Technology has developed high-performance broadband RF transceiver chips capable of single-chip GHz-level instantaneous bandwidth transceiver frequency conversion.

No. 3 Chengdu Zhenxin Technology Co., Ltd.

Industry Segment: Military Electronics

Profitability: ROE of 2.31%, gross profit margin of 52.91%, net profit margin of 4.96%

Performance Forecast: ROE has continuously declined to 2.31% over the past three years, with the latest forecast averaging 7.20%

Main Products: Integrated circuit business as the primary revenue source, accounting for 47.62% of income, with a gross profit margin of 61.51%

Company Highlights: Chengdu Zhenxin Technology Co., Ltd.'s independently developed converters, software-defined radios, and clocks can be used in the commercial spaceflight sector.

No. 2 Longsheng Technology

Industry Segment: Chassis and Engine Systems

Profitability: ROE of 12.31%, gross profit margin of 17.95%, net profit margin of 9.57%

Performance Forecast: ROE has continuously risen to 12.31% over the past three years, with the latest forecast averaging 14.15%

Main Products: New energy products as the primary revenue source, accounting for 43.15% of income, with a gross profit margin of 13.05%

Company Highlights: Longsheng Technology's controlled subsidiary, Tianyin Stellar, is a domestic commercial operator of star trackers, providing high-precision measurement data for spacecraft attitude control and astronomical navigation.

No. 1 Huace Navigation

Industry Segment: Communication Terminals and Accessories

Profitability: ROE of 17.74%, gross profit margin of 58.13%, net profit margin of 17.94%

Performance Forecast: ROE has continuously risen to 17.74% over the past three years, with the latest forecast averaging 18.70%

Main Products: System applications and solutions as the primary revenue source, accounting for 58.96% of income, with a gross profit margin of 55.81%

Company Highlights: Huace Navigation focuses on core technologies and products/solutions related to high-precision navigation and positioning. It is one of the few domestic enterprises capable of providing high-precision satellite navigation and positioning application solutions to customers.