Guosen: Private rocket industry urgently needs breakthrough, direct connection through smartphones and the future of laser communication is promising.

Guosen released a research report stating that China's commercial aerospace industry is currently in a period of accelerated development, with a vast market space. According to the bank's calculation, the market size of China's satellite internet is expected to reach nearly 100 billion yuan in the next five years, and the market size of supporting private rocket launches is expected to exceed 30 billion yuan. At the same time, with reference to the development of Starlink, the future of satellite applications and terminal markets is promising. It is recommended to first focus on the industrial chain of private rocket companies, and then focus on suppliers of satellite internet communication payloads and ground terminal suppliers. Guosen's main points are as follows: By 2025, global satellite internet construction will accelerate, with Starlink leading the industry and China accelerating its progress. As of June 2025, Starlink has launched nearly 9,000 satellites, serving over 5 million users globally, and covering over 100 countries and regions. The Starlink project's revenue in 2024 exceeded 8 billion US dollars (estimated by Playload), and it is expected that revenue in 2025 may exceed 11 billion US dollars. Starlink is constantly innovating in communication technology, with the new generation V3 constellation satellites having a capacity of 1Tbps per satellite and fully equipped with inter-satellite laser links. Starlink has also pioneered direct satellite connection for mobile phones and has collaborated with global leading operators such as T-Mobile. By the end of June, the parent company of Starlink, SpaceX (with Starlink accounting for about 70% of its business), was valued at 400 billion US dollars. China has planned three satellite constellations for satellite internet. From the end of last year to the middle of this year, the "GW constellation" of Xingwang has completed the deployment of 4 sets of 40 low-orbit satellites, and Yuanxin's "Qiansail constellation" has launched 5 sets of 90 satellites. China's satellite internet has entered a stage of accelerated development. In June of this year, CK Holdings' CEO of Xingwang and former China Telecom Corporation CEO Liang Baojun. The commercial models and technological bottlenecks of satellite internet urgently need to be overcome, and significant changes are evident. Commercial Model: Direct to Cell (DTC) connections for mobile phones need to be widely adopted, and the future of laser communication is promising. (1) DTC: China Telecom Corporation promoted direct satellite connection services for mobile phones on a large scale in 2024. As of May 2025, China Telecom Corporation, in cooperation with mainstream manufacturers such as Huawei and Xiaomi, has released over 30 direct-connected models, with annual sales exceeding 16 million units. From a technological evolution perspective, direct satellite connections will evolve from the current "new phone + old satellite" operated by telecommunications to the "old phone + new satellite" model operated by Starlink/ASTSpace mobile operators, and then to the future "new phone + new satellite" operated by 5G-NTN/6G. Direct satellite connections can be expanded from ordinary consumer-end applications to industry-end applications (emergency response, agriculture, public utilities) and can be extended from DTC to IoT D2D, becoming a fast track for China's satellite internet to go global. Starlink completed the deployment of a direct satellite constellation (570 satellites) in April this year. (2) Laser Communication: Starlink has been incorporating inter-satellite laser communication technology since its V1.5 constellation. This technology is expected to become a standard for satellite internet, with clear advantages in space-to-space communication backbone networks compared to undersea fiber optics. High-speed transmission in space-to-ground communication is expected to be applied in fields such as remote sensing and large data transmission. Chinese private companies have verified the Aurora Stellar Communications system for 400Gbps inter-satellite communication, and Longguang Satellite has achieved 100Gbps remote sensing image transmission. Rocket Breakthrough: Chinese private rocket companies are accelerating technological iteration and are expected to make breakthroughs in key areas such as reusability, liquid propulsion, and rocket body materials. Taking the leading private rocket company, Blue Arrow Aerospace, as an example, its "Zhuque No. 3" reusable rocket uses a self-developed methane-liquid oxygen engine, with a low-earth orbit payload capacity comparable to SpaceX's Falcon 9 at 18.3 tons. The rocket completed a static fire test of the first stage's nine engines on June 20 this year, and CCTV reported that the rocket is expected to make its first test flight in the second half of this year. In addition, in late May, Arrow Element Technology completed a 3km high-altitude test flight of their self-developed Yuanhang-1 (China's first "stainless steel rocket body + liquid oxygen methane" private rocket) reusable rocket. Risk Warning: Low-orbit satellite constellation construction progress falls short of expectations; the development and application of satellite internet scenarios fall short of expectations; the widespread occupation of frequency orbit resources; uncertainties in the integration of satellite communication with 6G.