China Securities Co., Ltd.: Satellite communication is expected to accelerate development and will also create vast markets such as space computing power in the future.

China Securities Co., Ltd. released a research report stating that satellite communication technology is undergoing an industrial revolution. Through technological innovations such as lowering orbital heights, using phased array antennas, and laser medium applications, transmission speeds have significantly increased, delays have been reduced, and application scenarios have been expanded. The booming development of the commercial aerospace industry has driven diversified demands for satellite internet, Internet of Things, and will potentially create a vast market for space computing power in the future. The global satellite communication market is expected to grow from $25.2 billion in 2025 to $83 billion in 2035, with a compound annual growth rate of approximately 13%. The new generation of satellite communication technology industry chain can be divided into upstream chips and components, midstream communication modules, and downstream satellite communication terminals. Leading companies in related fields are actively exploring the application of new technologies and products in satellite-to-satellite and satellite-to-ground communications, and are expected to benefit from the incremental market for satellite communication brought about by the development of the commercial aerospace industry. Key points from China Securities Co., Ltd. include: - The upgrade of satellite communication technology is the core driving force behind the industry's development. - Traditional GEO orbit satellites face problems of high latency and narrow bandwidth due to their high orbit, making it difficult to meet modern application requirements; LEO orbit significantly lowers the height, compressing delays to less than 50 milliseconds. Phased array antennas achieve multi-beam tracking and millisecond-level switching through electronic scanning, enhancing communication reliability and flexibility. Laser medium utilizes its high-frequency characteristics to support Tbps-level transmission, providing strong anti-interference capabilities for inter-satellite networking. These technological breakthroughs collectively address key pain points of latency, bandwidth, and stability, laying the foundation for the implementation of satellite communication in a wider range of scenarios. - The rise of the commercial aerospace industry has brought incremental demand to the satellite communication market. - Recyclable rocket technology has greatly reduced launch costs, with SpaceX completing 167 launches by 2025 and Starlink having over 9,300 satellites in orbit, covering over 150 countries with more than 9 million paid users. The new $50/month low-price package aims to accelerate penetration. Satellite communication applications have expanded from traditional broadcasting and maritime communication to remote area Internet, IoT, emergency response, and defense, with the global market size expected to reach $83 billion by 2035. Domestically, multiple entities have applied to the ITU for plans for over 200,000 satellites, with the industry supporting infrastructure gradually improving, and launch capabilities expected to increase to thousands annually, driving continued market growth. - The satellite communication industry chain covers upstream chips, midstream modules, and downstream terminal links. - Current Starlink satellites have carried onboard phased array antennas and laser link terminals, with a global supply chain achieving mass production and on-orbit operation of related chips, modules, and terminals. Domestically, leading companies in specific fields are actively deploying in areas such as phased array T/R chips, optical communication chips, satellite optical fiber amplifiers, satellite sensors, and high-speed communication terminals, verifying the implementation of high-speed optical communication technology between satellites and ground, providing fast, stable, and secure information transmission capabilities for the development of the commercial aerospace industry. Risk Analysis: - Macro-economic downturn risk; - Accounts receivable bad debt risk; - Intensified industry competition; - Unexpected policy and technological advancements.