CITIC SEC: China's aerospace industry has entered the "fast lane" of development, and the related industry chain is seizing development opportunities.

CITIC SEC released a research report stating that China's aerospace industry has entered a development "fast lane". With ChinaSatNet and the G60 Thousand Sails Constellation entering the mass launch phase, as well as the deployment of the Hainan commercial space launch center and commercial launch rockets, the trend of large capacity and low cost is leading the commercial aerospace industry into a new era. At the same time, space computing power is further breaking through industry barriers. The new trillion-dollar market is about to set sail, bringing huge development opportunities to the related industry chain. It is recommended to focus on the following specific areas: space computing power, focusing on the participants in existing projects; 1) CECEP Solar Energy batteries, supporting computing power electricity consumption; 2) laser modules, providing necessary inter-satellite/ground data exchange; 3) satellite manufacturing, providing a computing power operation platform; 4) rocket launches, an inevitable way to reduce the cost of space computing power; 5) ground terminals, solving end-user access to data center issues. CITIC SEC's main views are as follows: Beijing plans to build GW-level space computing power, with Orbital Dawn leading the launch of satellites in the near future. According to China News on November 27th, Beijing plans to build and operate a centralized large-scale data center system with a power capacity of over a gigawatt (GW) in the 700-800 kilometer dawn-dusk orbit, to move large-scale AI computing power into space. The construction of data centers is divided into three phases: from 2025 to 2027, breakthroughs in key technologies such as energy and heat dissipation, iterative development of experimental satellites, and construction of Phase I computing constellation; from 2028 to 2030, breakthroughs in key technologies such as on-orbit assembly and construction, reducing construction and operation costs, and building Phase II computing constellation; from 2031 to 2035, large-scale production of satellites and network deployment, on-orbit docking to establish a large-scale space data center. As the leading units, Future Star and Orbital Dawn have jointly established an innovative alliance for space data centers, and have already made breakthroughs in a series of key core technologies. The first generation of experimental satellite "Dawn-1" product development has been completed and is undergoing final assembly testing, with plans to launch at the end of this year or early next year. Space computing power, with low PUE and low electricity costs, has become a new trend in artificial intelligence development. With the slowdown in computing chip performance improvements, the development of artificial intelligence increasingly depends on data center scale. Considering that power consumption accounts for more than half of data center operating costs, the competition between China and the United States in AI is gradually shifting to electricity competition. The PUE of ground data centers is generally around 1.4, while space data centers, due to their simple cooling system, can theoretically reduce PUE to nearly 1, significantly reducing power consumption. By deploying space data centers and CECEP Solar Energy stations in space, with the use of high-energy lasers and other energy transmission methods, the energy consumption issue of computing power can be effectively solved, opening up growth opportunities for computing power and becoming a new trend in the development of artificial intelligence in the future. Space computing power needs to be deployed in the dawn-dusk orbit, where resources are scarce and competition is fierce. The dawn-dusk orbit is a special type of sun-synchronous orbit, which matches the rotation speed of the orbital plane with the Earth's rotation speed, allowing the satellite to continuously receive energy supply from CECEP Solar Energy as the dawn-dusk line of the Earth. Resources in the dawn-dusk orbit are extremely scarce, and according to the International Telecommunication Union's (ITU) "Radio Regulations", satellite frequencies and orbit resources need to be allocated and coordinated according to the principle of "first come, first served". There is fierce competition for orbit resources among major countries, and from the perspective of seizing resources, China's development of space computing power is expected to accelerate. Chinese and American technology giants have already begun laying out plans, and CECEP Solar Energy batteries and laser modules are expected to benefit. Jeff Bezos predicted on October 3 at the Italian Tech Week that gigawatt-level data centers will be built in space in the next 10 to 20 years; Elon Musk stated on November 4 that he will expand the Starlink V3 satellite program to build space data centers, and on the 9th, he tweeted again that Starship will open up large-scale deployment paths for computing power satellites; on November 2, Nvidia innovatively sent its H100 GPU into space; Google announced the "Collector Project", planning to launch two prototype space computing power satellites in early 2027. On May 14, Zhejiang Laboratory and China Aerospace Cooperation successfully launched the first batch of 12 computing satellites for the "Three-Body Computing Constellation", becoming the world's first operational space computing satellite constellation. Space computing constellation entails huge energy consumption, and the market space for batteries such as gallium arsenide and perovskite from CECEP Solar Energy is vast; after deploying computing power, the demand for inter-satellite and satellite-ground data exchange bandwidth will increase, prompting the urgent need for iteration and upgrades of laser modules, benefiting the core targets of the industry chain. Risks: The construction of satellite internet constellations is lower than expected, the construction of space computing power constellations is lower than expected, the progress of satellite launch plans is lower than expected, the construction and operation of satellite ground facilities and services is not as expected, the speed of commercial Addsino Co., Ltd. is not as expected, and foreign satellite launch technologies are advancing faster.