China Securities Co.,Ltd.: Commercial Aerospace Investment Opportunities in 2026

China Securities Co., Ltd. released a research report stating that in the "15th Five-Year Plan," the future industries and emerging pillar industries mentioned involve various industries related to military technology, such as commercial aerospace, low-altitude economy, deep-sea technology, future energy, large aircraft in the broad military industry field, and AI, 3C consumer electronics, Siasun Robot&Automation in the civilian field. The company believes that during the "15th Five-Year Plan" period, the above-mentioned areas will become vast trillion-dollar tracks in the market, and for military companies to achieve sustained growth in their scale, expansion in the above-mentioned areas is essential. At the same time, the development of the above-mentioned areas will lead to the development of various new technologies, materials, and devices, such as additive manufacturing, superhard materials, ceramic-based composite materials, and companies related to them will also benefit. The research report summary is as follows: Commercial Aerospace: Accelerating the networking of low-orbit satellite constellations to build space infrastructure for navigation and remote sensing. Commercial aerospace refers to space activities carried out using social capital and market mechanisms under the guidance of relevant national laws and regulations. It complements government-led aerospace activities and can effectively improve resource allocation efficiency and benefits, reduce costs, and support the long-term development of aerospace technology. The global aerospace industry is moving towards commercialization. According to the Satellite Industry Association's report for 2025, global satellite industry revenue continued to grow in 2024, reaching $293 billion, accounting for 71% of the global aerospace economy. As of the third quarter of 2025, the total number of in-orbit spacecraft worldwide exceeded 13,000, with communication satellites accounting for over 70% and remote sensing satellites accounting for approximately 20%. Satellite communication technology utilizes artificial communication satellites as relay stations for wireless radio wave transmission and reception. Satellite communication systems mainly consist of three parts: space segment, ground segment, and user segment. Satellite Internet refers to a global seamless internet connection based on satellite constellations. Compared to terrestrial internet, satellite internet has the advantages of wide coverage, low intercontinental communication latency, support for massive flexible communication, low construction costs, and suitability for emergency scenarios. However, its system capacity is limited and cannot meet the concurrent communication demands in high population density areas. Additionally, it does not match the performance requirements of 5G communication in terms of spectrum efficiency, peak rate, and network latency. After three development waves, the positioning of satellite internet's "complementary fusion with ground communication systems" is gradually becoming clearer. The integration and development of satellite internet with 5G, the satellite-to-ground fusion network is a key pillar of the future 6G network. The International Telecommunication Union (ITU) has proposed four satellite internet and 5G integration application scenarios: relay station to zone, zone backhaul, mobile backhaul, and hybrid multicast. 5G satellite mainly targets eMBB-s (Enhanced Mobile Broadband), mMTC-s (Massive Machine Type Communication), HRC-s (Highly Reliable Communication). According to the IMT-2030 (6G) Promotion Team's "6G Typical Scenarios and Key Capabilities" white paper, 6G will possess typical features such as ubiquitous connectivity, inclusive intelligence, multidimensional perception, full-coverage, green low-carbon, and inherent security, with the satellite-to-ground fusion being key to achieving ubiquitous connectivity and full coverage. Given the scarcity of satellite spectrum resources, it is urgent for China to build a satellite internet network. The frequency and orbit resources of low-orbit satellites are becoming increasingly scarce, and following the "first come, first served" principle, several space-faring nations have already filed large-scale constellation plans with the ITU. The United States has occupied the golden frequency band (Ku band) for low-orbit satellite communications, while China's applied frequency distribution is in the Ka and V bands. Although these frequencies are higher and offer a larger available frequency range, they are more susceptible to rain fade and require higher signal receiver requirements. There is only one GEO orbit around Earth, and the near-Earth orbit can accommodate approximately 100,000 satellites, with an estimated deployment of around 57,000 satellites by 2029. Meanwhile, the Ku and Ka communication frequency resources primarily used by low-orbit satellites are gradually reaching saturation. With satellite frequencies and orbit resources becoming more scarce, orbits and spectrum space have become crucial strategic resources for countries to secure an advantage. The international situation is pressing, prompting China to accelerate its constellation construction and commercial aerospace launches. Since 2020, the global number of rocket launches has reached new highs for three consecutive years, and overall aerospace activities have significantly increased, showing an unprecedented level of activity. In the field of communication satellites, China's construction of low-orbit satellites lags behind high-orbit high-throughput satellites. The Tian Tong-1 satellite is China's mature GEO satellite constellation widely used across various industries. In 2024, China's two mega-constellations (GW and G60) were officially networked, marking a new era of normalized constellation deployment. By the end of October 2025, SpaceX's Starlink satellites had accumulated over 10,000 launches, and the GW and Yuanxin G60 constellations had deployed around a hundred satellites each. Policy side: In the 2024 Government Work Report, it was proposed to actively develop commercial aerospace and other new growth engines. Commercial aerospace, as a strategic emerging industry, has received high attention and support from the government. During the "15th Five-Year Plan," the core transformation of China Addsino Co., Ltd. is moving from "exploration" to "application," with the aim of nurturing a trillion-yuan market size. Compared to the "14th Five-Year Plan," the "15th Five-Year Plan" places more emphasis on the coordinated development of the entire industry chain, including rocket manufacturing, satellite applications, and terminal services, and actively promotes the commercialization of applications like direct-to-phone satellite connections. Rocket launch side: The Haikou Shifa's 1st and 2nd launch sites have started normal launch operations, with the 3rd and 4th sites expected to be constructed and operational by the end of 2026, surpassing a target annual launch capacity of 60 launches. Haikou Commercial Aerospace Launch Site's maritime recovery system has commenced work, with delivery expected before the end of 2026. The central launch bases (Ningbo Xiangshan + Guangdong Yangjiang Launch Site) are being constructed in an orderly manner. Since the end of July 2025, the launch frequency of China's GW constellation has significantly increased, with launch intervals shortened from one to two months for stars 01-05 to 3-5 days for stars 05-11, accelerating the network deployment, making frequent "dense networking" a future norm. With policy support and guidance, social capital continues to invest in enterprises, and research institutions actively participate in commercial Addsino Co., Ltd., having the capabilities for developing medium-sized rockets, satellite development and operation control, and diverse application services. It is expected that major liquid recoverable carrier rockets will commence their inaugural flights in the fourth quarter of 2025. Enterprise side: State-owned enterprise groups are accelerating their layout in commercial aerospace, with the satellite manufacturing and rocket launch sides making up for their shortcomings. The Aerospace Hi-Tech Holding Group established commercial satellite and commercial rocket companies in September 2024. With the confirmation of China's commercial entities, the industry as a whole is expected to accelerate its development. Meanwhile, with the transformation of the supply chain from the traditional military supply chain to commercial and private markets, costs and efficiency are expected to significantly improve. The IPO green channel has been opened for rocket companies, following the fifth standard of the Science and Technology Innovation Board, supporting commercial aerospace enterprises in the loss-making stage. Currently, all six major commercial rocket-leading enterprises in China have initiated IPOs, including Tianbing Technology, Blue Arrow Aerospace, Xinghe Power, Star Glory, CASIC Aerospace, and Eastern Space, with a total valuation exceeding trillion yuan. The Aerospace Hi-Tech Holding Group has secured new funding for the Long March rocket and Yuanxin Satellite has begun a new round of financing. Overall, it is expected that starting from 2026, China will officially enter the high-frequency constellation networking stage of satellite internet. With the gradual progress of China's satellite internet construction demand, the overall industry scale is expected to rapidly increase in the coming years. It is suggested to give priority to the upstream satellite manufacturing and rocket launch ends of the industry. Focus on the formal construction of various low-orbit satellite constellations in China and the time points for batch networking, as this may serve as a turning point for the performance realization of enterprises in the satellite internet industry chain.