Zhonghang Securities: The domestic reusable rocket technology is accelerating towards maturity, and the launch costs are declining. Space photovoltaics is approaching a turning point for industrialization.

Sealand released a research report stating that the rapid development of commercial aerospace is driving humanity's exploration of space from single-point missions to large-scale infrastructure development. The networking of low-Earth orbit satellites, the continuous cost reduction of reusable rockets, and the gradual entry of emerging scenarios like space computing into engineering verification stages are making stable, efficient, and low-cost space energy supply a key prerequisite for industry development. Recently, the successful launch and recovery verification of the Long March 10B rocket has further strengthened expectations for the accelerated maturation of domestic reusable rockets and the reduction in launch costs. As the most mature method of on-orbit power supply, space photovoltaics is gradually evolving from a supporting power source for traditional spacecraft into space energy infrastructure and becoming an important emerging industry direction connecting commercial aerospace, photovoltaic manufacturing, and AI computing power. China Aviation Securities presents the following key points: Space photovoltaics is evolving from dedicated power sources for spacecraft to space energy infrastructure. Space photovoltaics extends technologies such as photovoltaic cells, space-grade packaging, solar arrays, and power management into aerospace scenarios. The mass networking of low-Earth orbit constellations and the concept of space computing drive the transformation of space power supply towards standardized and large-scale delivery. Compared to terrestrial photovoltaics, space photovoltaics offers many advantages, including stable lighting, local energy supply, and low reliance on energy storage, but its large-scale application is still constrained by launch costs, space environments, on-orbit reliability, and thermal control capabilities. Overall, the industry is in the early stages of transitioning from dedicated power sources for spacecraft to space energy infrastructure. Low-Earth orbit constellations contribute incremental growth, high-reliability missions support a stable foundation, and space computing opens up long-term flexibility. Projects such as Starlink, Amazon Leo, China Xiangnet, and Qianfan Constellation continue to advance, with low-Earth orbit constellations forming the most definite application scenarios for space photovoltaics due to their quantity and ongoing networking demands. The number of medium to high-orbit communication, navigation, meteorological satellites, and deep space exploration missions is relatively limited, but they require higher standards for lifespan, radiation resistance, and system reliability, serving as a stable source of high-value space power demand. Space computing is still in the engineering verification and industrial planning stages, but its power output per platform is significantly higher than that of traditional satellites, making it the core variable determining the industry's long-term potential. The technology roadmap is not a simple replacement; it is determined by task scenarios, leading to layered penetration. GaAs/III-V multi-junction cells will maintain a significant position in high-reliability tasks like high-orbit communication, deep space exploration, and space stations due to their high efficiency, strong radiation resistance, and long flight history; PERC.TOPCon, HJT, and other crystalline silicon routes, supported by mature supply chains, low costs, and mass production capabilities, are expected to be the first to penetrate cost-sensitive low-Earth orbit constellations; perovskite and perovskite/crystalline silicon tandem cells offer high efficiency, high power-to-weight ratios, and flexibility advantages, but still need to achieve large-area yield, space environment stability, and on-orbit lifespan verification. We believe that space photovoltaics will evolve along the direction of "GaAs forming a high-reliability foundation, crystalline silicon routes driving cost reduction and expansion, and perovskite tandems unlocking long-term flexibility," and the replacement process will not be instantaneous. The commercialization inflection point depends on the combined improvement of launch costs, power-to-weight ratio, and on-orbit lifespan. Launch costs determine the threshold for unit power entry into orbit, while lightweight designs and high power-to-weight ratios dictate the scalability of large solar arrays. On-orbit lifespan and reliability determine the economic feasibility over the full lifecycle. From 2026 to 2030, mass networking of low-Earth orbit constellations is expected to first drive the large-scale delivery of space power supply; from 2030 to 2035, reusable rockets are expected to further reduce costs, crystalline silicon routes will complete on-orbit verification, and space computing is likely to enter the demonstration and early commercialization phase; the commercialization timeline for large space energy systems, lunar bases, and ground-energizing space CECEP Solar Energy power stations remains relatively distant. Multi-scenario demand resonance is expected to rapidly grow market space as application scenarios expand. In a neutrally optimistic scenario, global space photovoltaic demand is estimated to be about 0.18 GW in 2026, corresponding to a market value of about 57.2 billion yuan; by 2030, global demand is expected to reach 20.90 GW, corresponding to a market value of approximately 1.32 trillion yuan; and by 2035, global demand may reach 101.81 GW, corresponding to a market value of approximately 3.79 trillion yuan, with domestic demand around 25.60 GW (valued at about 0.95 trillion yuan) and overseas demand around 76.21 GW (valued at about 2.84 trillion yuan). It is important to emphasize that the scale of deployment for space computing, launch costs, and technological progress still carry significant uncertainties, making long-term estimates more suitable as scenario spaces, while short-term orders should still largely rely on the actual launch pace of low-Earth orbit constellations. Investment strategies should focus on system entry points, technology migration, and equipment materials. From an investment perspective, it is advisable to focus on three main lines: "system entry points, technology migration, and equipment materials." Regarding system entry points, attention should be paid to system-level suppliers that hold aerospace model certification, flight experience, and space power supply system delivery capabilities, with representative companies such as CETC Lantian Technology; in terms of technology migration, it is essential to grasp the rhythm of technological evolution, as the high-reliability GaAs route will continue to benefit from high-value task demands such as high-orbit satellites, deep space exploration, and space stations in the short term, suggesting attention to companies like Yunnan Lincang Xinyuan Germanium Industry, Xiamen Changelight, and Sanan Optoelectronics; in the medium term, the crystalline silicon cost-reduction route is expected to achieve penetration in cost-sensitive low-Earth orbit constellations due to its mature supply chain, low costs, and mass manufacturing advantages, with companies like Risen Energy, Trina Solar Co., Ltd., Jinko Solar, and Hainan Drinda New Energy Technology being noteworthy; in the long term, perovskite and tandem routes with high efficiency, high power-to-weight ratios, and flexible potential are expected to adapt to space computing and large space energy systems, suggesting attention to companies like GCL-Poly, Jidian Optical Energy, Xina Optoelectronics, and those working on tandem technology like LONGi Green Energy Technology and Trina Solar Co., Ltd. In terms of equipment materials, the space adaptation of crystalline silicon and perovskite routes will drive the demand for thin film, HJT/TOPCon equipment, TCO, silver paste, interconnects, and space-level packaging materials, with attention suggested for Suzhou Maxwell Technologies, Shenzhen S.C New Energy Technology Corporation, Shandong Jinjing Science & Technology Stock, Changzhou Fusion New Material, and Guangzhou Lushan New Materials.