Launch vehicles are the mainstay for commercial satellite deployments. Their core components encompass the rocket body framework, propulsion system, guidance system (part of the control system), and the electrical system (within the broader additional system).

Forecasts indicate that China's rocket launch services market is poised to expand to RMB 138.3 billion between 2025 and 2030, averaging roughly RMB 23 billion per year. Liquid launch vehicles (reusable) are projected to dominate with an 88% market share, translating to an average of RMB 20.3 billion annually.

Deconstructing the Commercial Space Launch Vehicle Industrial Chain

Upstream: Essential Raw Materials and Core Components

Raw Materials: Carbon fiber (Guangwei Composites), superalloys (Gangyan Gaona), and titanium materials (Baoji Titanium Industry) are pivotal for rocket body construction and engine production. Propellants primarily consist of liquid oxygen/kerosene and liquid oxygen/methane, with Jiufeng Energy supplying specialized fuels and gases to launch facilities.

Electronic Components: These include radiation-hardened chips (Unigroup Guoxin Microelectronics), sensors (Gaohua Technology), and connectors (Aerospace Electronics), acting as the "nerve center" of the rocket's control system.

Three Core System Components

Structural System: Constituting 25% of rocket costs, this includes tanks (HuanYu QianKun, JiuTian XingGe), fairings (Aista Aerospace), and structural components (Shanghai HG, Chaojie Stock). Tanks and fairings account for 25% and 10% of costs, respectively.

Propulsion System: Representing 50% of rocket costs, this is the most technically demanding segment. Liquid engines (Jiuzhou Yunjian, LandSpace) dominate the reusable rocket market, while solid engines (Aerospace Fourth Academy) are favored for rapid small satellite deployments.

Control System: Making up 15% of rocket costs, this includes inertial navigation equipment (Aerospace Electronics), integrated control computers (Fudan Microelectronics), and servo systems (Hangyu Servo), crucial for determining rocket orbital precision and recovery capabilities.

Midstream: Rocket Design and Assembly Integration

Rocket Design: Crafting rocket solutions tailored to specific launch missions. Private firms like LandSpace (Zhuque-3) and CAS Space (Lijian-2) focus on liquid reusable rockets, while state-owned enterprises primarily rely on the Long March series by the China Aerospace Science and Technology Corporation.

Assembly Integration: Combining components into complete rockets and conducting vibration, thermal vacuum, and other tests. Aerospace Power and Zhongtian Rocket are key assembly players, with Platt's 3D printing technology significantly reducing costs for complex components.

Downstream: Launch Services and End-User Applications

Launch Services: Encompassing launch site operations (Hainan Commercial Space Launch Site), mission planning, and tracking support. The China Aerospace Science and Technology Corporation and China Satellite Network Group are major clients, undertaking network launch tasks for constellations like the State Grid and Qianfan.

End-User Applications: Covering satellite communications, navigation, remote sensing (40% market share), and ground equipment manufacturing (50% market share). Emerging scenarios like direct-to-phone satellite connectivity and space-based computing data centers are pushing industry boundaries, with future growth anticipated in space tourism and suborbital transportation.

Profitability of Firms in the Commercial Space Launch Vehicle Chain

Corporate profitability generally mirrors earnings volume and quality over a defined period. Profitability analysis entails a thorough examination of company profit margins.

This article, part of the Enterprise Value Series' [Profitability] segment, selects 43 firms in the commercial space launch vehicle chain as research subjects, utilizing return on equity (ROE), gross profit margin, and net profit margin as evaluation criteria.

Data is grounded in historical performance and does not predict future trends; it serves solely for static analysis and does not constitute investment advice.

No. 10 Torch Electronics

Industry: Military Electronics

Profitability: ROE of 3.57%, gross profit margin of 31.23%, net profit margin of 6.26%

Performance Outlook: ROE has declined for three consecutive years to 3.57%, with the latest forecast averaging 8.68%

Key Products: International trade is the primary revenue driver, accounting for 59.03% of income, with a gross profit margin of 14.55%

Company Strengths: Torch Electronics' components division offers both passive and active components, widely utilized in high-end sectors like aviation, aerospace, shipbuilding, communications, and new energy.

No. 9 Guoke Military Industry

Industry: Ground Warfare Equipment

Profitability: ROE of 8.89%, gross profit margin of 34.42%, net profit margin of 17.15%

Performance Outlook: ROE has declined for three consecutive years to 8.89%, with the latest forecast averaging 9.24%

Key Products: Military products are the primary revenue source, accounting for 96.89% of income, with a gross profit margin of 34.50%

Company Strengths: Guoke Military Industry boasts advanced technological prowess and cost-effective manufacturing capabilities in commercial space launch vehicle propulsion applications.

No. 8 Sushi Testing

Industry: Testing Services

Profitability: ROE of 8.85%, gross profit margin of 44.54%, net profit margin of 13.40%

Performance Outlook: ROE has declined for three consecutive years to 8.85%, with the latest forecast averaging 9.63%

Key Products: Environmental reliability testing services are the primary revenue stream, accounting for 49.84% of income, with a gross profit margin of 56.96%

Company Strengths: Sushi Testing provides industrial product environment and reliability testing verification and comprehensive analysis solutions, with downstream clients spanning industries like low-altitude aviation and aerospace.

No. 7 AVIC Optoelectronics

Industry: Military Electronics

Profitability: ROE of 15.67%, gross profit margin of 36.61%, net profit margin of 17.15%

Performance Outlook: ROE has fluctuated between 15%-18% over the past three years, with the latest forecast averaging 10.99%

Key Products: Electrical connectors and integrated interconnection components are the primary revenue generators, accounting for 78.36% of income, with a gross profit margin of 39.37%

Company Strengths: AVIC Optoelectronics' main offerings include optical, electrical, and fluid connectors, optoelectronic devices, cable assemblies, and integrated equipment.

No. 6 Hangyu Technology

Industry: Aviation Equipment

Profitability: ROE of 10.82%, gross profit margin of 28.03%, net profit margin of 10.31%

Performance Outlook: ROE has declined for three consecutive years to 10.82%, with the latest forecast averaging 10.98%

Key Products: Aviation forgings are the primary revenue source, accounting for 75.55% of income, with a gross profit margin of 29.88%

Company Strengths: Hangyu Technology is Asia's largest supplier of commercial aerospace engine ring forgings, specializing in aviation difficult-to-deform metal ring forgings.

No. 5 Guangwei Composites

Industry: Aviation Equipment

Profitability: ROE of 13.50%, gross profit margin of 45.55%, net profit margin of 28.01%

Performance Outlook: ROE has declined for three consecutive years to 13.50%, with the latest forecast averaging 11.87%

Key Products: Carbon fiber and fabrics are the primary revenue drivers, accounting for 59.27% of income, with a gross profit margin of 58.37%

Company Strengths: Guangwei Composites focuses on the design and research of aerospace composite materials products and is a primary supplier of carbon fiber for national defense and military applications.

No. 4 Haoneng Stock

Industry: Chassis and Engine Systems

Profitability: ROE of 13.33%, gross profit margin of 33.98%, net profit margin of 13.58%

Performance Outlook: ROE has fluctuated between 8%-14% over the past three years, with the latest forecast averaging 12.06%

Key Products: Synchronizers are the primary revenue source, accounting for 52.55% of income, with a gross profit margin of 33.65%

Company Strengths: Haoneng Stock's aerospace components business includes precision machining of aviation structural parts, standard parts, and material test pieces. Its joint venture, Aerospace Shenkun, possesses manufacturing capabilities for commercial rocket structural parts.

No. 3 Sirui New Materials

Industry: Other New Metal Materials

Profitability: ROE of 10.44%, gross profit margin of 23.09%, net profit margin of 8.96%

Performance Outlook: ROE has increased for three consecutive years to 10.44%, with the latest forecast averaging 12.49%

Key Products: High-strength, high-conductivity copper alloy materials and products are the primary revenue generators, accounting for 44.44% of income, with a gross profit margin of 20.34%

Company Strengths: Sirui New Materials' product, the liquid rocket engine thrust chamber inner wall, is a vital component of rocket engine thrust chambers.

No. 2 Jiufeng Energy

Industry: Gas

Profitability: ROE of 19.79%, gross profit margin of 9.33%, net profit margin of 7.65%

Performance Outlook: ROE has increased for three consecutive years to 19.79%, with the latest forecast averaging 15.43%

Key Products: Clean energy is the primary revenue source, accounting for 89.16% of income, with a gross profit margin of 7.64%

Company Strengths: Jiufeng Energy's main business spans clean energy, energy services, and specialty gases. The company successfully secured the contract for the Hainan Commercial Space Launch Site's special fuel and gas support project.

No. 1 Donghua Testing

Industry: Instrumentation

Profitability: ROE of 17.21%, gross profit margin of 66.37%, net profit margin of 24.10%

Performance Outlook: ROE has fluctuated between 13%-23% over the past three years, with the latest forecast averaging 19.12%

Key Products: Structural mechanics performance testing and analysis systems are the primary revenue stream, accounting for 60.01% of income, with a gross profit margin of 66.50%

Company Strengths: As a provider of equipment and system solutions, Donghua Testing deeply participates in key test phases of the Zhuque-3 rocket, offering professional and reliable technical support.