China Securities Co., Ltd.: Optimistic about the future performance of the commercial aerospace sector, focusing on companies in the industry chain segments.

China Securities Co., Ltd. released a research report stating that the commercial aerospace sector has experienced significant pullback recently due to a number of rocket launch failures/delays and changes in market sentiment. As of March 30, 2026, the average pullback exceeded 30%. with subsequent catalysts, and with the repair of market sentiment, we are optimistic about the future performance of the commercial aerospace sector. In the satellite sector, key areas of focus include overall payload, antennas and accessories, laser communication terminals and accessories, solar panels and energy systems. In the rocket sector, the focus is on engines and their 3D printing, as well as rocket body structural components. In the ground equipment sector, the focus is on civilian terminals and direct connections with smartphones, while in the operational services sector, the focus is on companies with scarce qualifications. Key points from China Securities Co., Ltd. include: Core Points The future of commercial aerospace is vast, with both China and the United States placing high strategic importance on commercial aerospace. SpaceX is leading in terms of constellation deployment progress, rocket capacity and costs, revenue volume, and valuation size. Driven by the strategic value of orbit protection and the commercial value of operational services, China's policy is actively supporting the development of commercial aerospace, leading to accelerated progress in the industry. We are optimistic about the future performance of the commercial aerospace sector, with a focus on key areas such as payload overall, antennas and accessories, laser communication terminals and accessories, solar panels and energy systems in the satellite sector, key areas in the rocket sector such as engines and their 3D printing, and arrow body structural components, key areas in the ground equipment sector such as civilian terminals and direct connections with smartphones, and key areas in the operational services sector such as companies with scarce qualifications. Strategic Significance Both China and the United States place high strategic importance on commercial aerospace. Currently, China's core focus in developing commercial aerospace is on ensuring orbit protection. The United States advocates for "ensuring space dominance," with SpaceX making progress in Starship deployment, and Blue Origin's New Glenn rocket successfully recovered. The urgency of China's constellation protection demand is growing. The "Fifteenth Five-Year Plan" for the first time emphasizes becoming a "space power," with subsequent policies actively supporting the development of commercial aerospace from both the industrial and capital markets perspectives, boosting industry development. Commercial Value The space of commercial aerospace is vast and boundless. In the satellite manufacturing sector, the construction of a giant constellation composed of tens of thousands of satellites and continuous network demand brings about a market scale of hundreds of billions. Further imagination is opened up in space data centers; in the rocket launch sector, apart from satellite launch demand, as rocket capacity increases and launch costs decrease, activities such as space tourism, global rapid transportation, space biological experiments, resource development and utilization will be organized, with the ground equipment and operational services sectors bringing about a market space of trillions, including satellite internet operation services and various terminals directly connected to satellites. Valuation Benchmarking SpaceX is expected to go public in 2026, with a target valuation of $1.25 trillion. ASTS and RKLB have market values exceeding $30 billion, with the total valuation of US commercial aerospace related companies far exceeding that of China's listed companies. Domestic policies support commercial aerospace enterprises going global, indicating that China is expected to occupy more global market share in the future, with great market growth potential and substantial room for enterprise valuation growth. Industry Progress China continues to break through the core bottlenecks in the rocket industry. The successful maiden flight and orbital insertion of the Zhuque 3 and Long March 12A rockets, as well as the successful recovery of the first stage booster, the successful maritime landing of the Long March 11 first stage, and the successful maiden flight and orbital insertion of the Expace Kuaizhou-2, indicate that private and institutional rockets that compete with Falcon 9 will initiate maiden flights and recovery trials intensively, while launch facilities continue to expand. The turnaround time is significantly shortened, potentially resolving industrial bottlenecks gradually, greatly accelerating the construction of China's constellation in the medium to short term, and in the long term, driving the explosion of applications such as space tourism and space transportation. Future Catalysts China and the United States resonate with each other, leading to intensive industrial catalysts both domestically and internationally. Multiple models of carrier rockets will continue to conduct maiden flights and recovery trials, with rocket recovery expected to be achieved this year, and the steady progress of commercial rocket company IPOs, with leading companies expected to go public within the year. The Starship V3 version is expected to begin test flights, with SpaceX expected to go public within the year. Risk Analysis 1. Satellite internet construction falls short of expectations; 2. Technological breakthroughs fall short of expectations; 3. Increased competition for spectrum and spatial resources; 4. IPO progress of related companies falls short of expectations.