Zheshang: Satellite application demand release, rocket supply expected to break through.

Zheshang has released a research report stating that deploying data centers in near-earth orbit has become a promising new option for various technology companies in their future computing strategic layout. China's low-orbit constellation is about to enter a peak launch period. The upcoming test launch of new models by private rocket companies such as Zhuque-3 and Tianlong-3 is expected to reduce launch costs to 20,000 RMB/kg, approaching the cost of SpaceX's Falcon 9. With the decrease in launch costs, more constellation companies can afford the launch costs, thereby unleashing potential demand. The rocket industry is currently in a capacity expansion period with high-value targets and high barriers to entry. Zheshang's main points are as follows: Satellite Internet: Satellites are used for both military and civilian communications, and space computing opens up new possibilities. Satellite Internet is a new network that uses a certain number of satellites to cover the entire globe, providing broadband internet access to ground and airborne terminals. It can help the military build a stronger communication network system and expand the service range of ground user network systems. Space computing is expected to solve the current cooling and power supply bottlenecks of data centers. Earth's limited power supply restricts the expansion of data centers, but space data centers can use CECEP Solar Energy at high intensity 24/7, unaffected by the atmosphere, with a power generation efficiency five times that of the ground. Space data centers also do not require water for cooling. Therefore, deploying data centers in near-earth orbit has become a promising new option for various technology companies in their future computing strategic layout. The construction progress of low-orbit constellations is lower than expected, and rocket launch demand is entering a period of rapid growth. China's low-orbit constellation planning and demand are huge, facing pressure of frequency allocation and orbital location. Space low-orbit satellites have limited capacity, and frequency resources need to be allocated in advance. According to ITU requirements, the total number of launches must reach 50% within 12 years, and the entire constellation must be completed within 14 years. Currently, the largest constellation networks in China, GW and G60, are still in the initial stages, and as of November 2025, the number of satellites in orbit is less than 1% of the planned number. China's constellation construction progress is seriously lagging, and it is about to enter a peak launch period. In the next five years, a total of about 16,000 satellites are expected to be launched for G60, GW, and other commercial plans. Assuming each rocket carries 10 satellites, the number of launches will increase rapidly from 54 in 2025 to 860 in 2030. During this period, the CAGR is 74%. It is estimated that by 2029, space computing will correspond to 6,800 rocket launches in China and 15,000 rocket launches globally. According to IDC's prediction, China's computing power is expected to reach 1,124 EFLOPS by 2025 and 5,457 EFLOPS by 2029, with a CAGR of 49%. By 2029, the global total computing power is expected to reach 14,130 EFLOPS, with a CAGR of 45%. Taking the "Three-Body" constellation as a reference, it initially launched 12 computing satellites, with a total computing power of 5POPS. If 2% of the global computing power is transferred to space by 2029, it will correspond to 6,800 rocket launches in China and 15,000 rocket launches globally. Rocket launch costs are continuously decreasing, and industry capacity is continuously expanding. State-owned enterprises are continuously expanding their capacity, and private rocket companies are expected to concentrate on test launches by the end of this year, with a potential increase in production next year. On the state-owned side, in 2023, Shaanxi Aerospace Power Hi-tech, a company under CASC, is building a new liquid propulsion manufacturing base in Baoji Aerospace, and in 2025, the second phase of the commercial aerospace engine project's main assembly workshop is expected to have the capacity to produce a total of 300 liquid rocket engines per year. On the private side, the planned annual production capacity of Space Pioneer is 20 launches, Tianbing Technology's Tianlong-3 rocket aims to produce 30 launches per year, and Interstellar Glory's Hyperbolic-3 is also expected to achieve an annual production of 20 launches. The operating costs of new rocket models under development by private rocket companies are continuously decreasing, and the frequency of satellite launches is expected to continue to increase. The upcoming test launches of new models by private rocket companies such as Zhuque-3 and Tianlong-3 are expected to lower launch costs to 20,000 RMB/kg, approaching the cost of SpaceX's Falcon 9. With the decrease in launch costs, more constellation companies can afford the launch costs, thereby unleashing potential demand. Industrial chain targets: The rocket industry is currently in a capacity expansion period with a shortage of supply, and has high-value targets and high barriers to entry. Suppliers: Hangzhou Oxygen Plant Group: supplier of rocket liquid oxygen fuel; Xi'an Bright Laser Technologies: supplier of rocket 3D printing parts; Shaanxi Sirui Advanced Materials: supplier of rocket engine copper alloy; Sinomach Precision Industry Group: supplier of rocket bearings; Essence Fastening Systems: supplier of rocket structural components; Nanjing GOVA Technology: supplier of rocket sensors; Chengdu Haoneng Technology: core supplier of rocket structural components and key systems. Potential main factories: Shaanxi Aerospace Power Hi-tech: the only listed platform under CASC; Changzheng Engineering Technology: the only listed platform under CASC; Shaanxi Zhongtian Rocket Technology: the only listed platform under CASC. Risk warning: Space computing progress falls short of expectations; Satellite internet construction falls short of expectations; Rocket production expansion falls short of expectations.