Private investment fuels China
commercial space sector growth, alongside state-backed
investment
China Satcom Market Cap Reaches
US$11 Billion in May 2020, State-Owned Enterprise CASC
Revenues Reach US$37 Billion in 2018
In its latest research titled,
“China Space Industry Report”, Euroconsult provides in
depth analysis of how commercialization is driving both
growth and technology advances in the Chinese space
sector, with oversubscribed IPOs and a wave of private
investment. China Satcom is now the world’s highest
valued pure satellite operator with a market cap of
US$11 billion as of May 2020, while China Satcom parent
company China Aerospace Science and Technology
Corporation (CASC) reported record revenues of $37
billion in 2018.
With a deep-dive into the structure
of the Chinese space industry, the report details the
relationships between myriad space organizations and
China’s complex delineation between commercial and
government entities. The Chinese government began to
liberalize private investment into the space sector in
2014, and since then more than US$900 million in private
funding has been invested. With nearly equal investment
from government sources, commercial companies have
raised a total of at least US$1.85 billion since 2014.
Notably, Euroconsult finds that
following a short-term lull in activity corresponding to
the COVID-19 pandemic, the Chinese space industry is
rebounding strongly, having resumed launches, re-opened
manufacturing facilities, and continued to move forward
with much-needed reforms. The pandemic has coincided
with a drop in funding, with 2020 thus far seeing around
RMB 900M of funding raised by Chinese space companies,
however this is partly due to 2019 being a historically
large year in terms of funding.
“Our overview and analysis of the
Chinese space ecosystem provides context and
understanding for one of the most opaque markets in the
world,” said Blaine Curcio, Euroconsult Senior Affiliate
Consultant based in Hong Kong. “The growth of the
private sector since 2014 has been astonishing, and
there is little to suggest a deceleration in this
growth. That being said, the low starting point for the
private sector, combined with the sheer size of
state-owned incumbents, means that the private sector
remains extremely fast-growing but relatively small.”
In addition to information on
Chinese investment in the space sector, the research
provides detailed analysis of five market segments
including Earth observation, ground systems, launch
services, satellite communications, and satellite
manufacturing. It sizes the markets and discusses both
government and private companies in each sector,
including their business activities and international
plans. It also delves into vertical sub-segments such as
the national TT&C network, backhaul and trunking demand,
and Chinese plans for low-earth orbit (LEO) broadband
constellations similar to western concepts such as
Starlink.
The report includes an Excel
database which organizes hundreds of data points,
including funding, supply, demand, and revenue numbers
for each of the five market segments. It also provides
an up to date analysis of the LEO constellations being
developed in China today as well as information on
China’s NGSO filings with the ITU for Q/V-band, X-band,
and S-band spectrum rights.
Key Findings
Euroconsult’s analysis shows that
from 2014 to 2019 there were 319 launches of Chinese
manufactured satellites. Of these, 178 were launched in
2018 and 2019, reflecting the recent expansion of
China’s manufacturing and launch capabilities.
In the launch sector there have
been 46 rounds of private investment in Chinese launch
companies since 2014, with total funding raised from
both private and government sources of roughly US$1
billion. This investment is targeted at commercial
launch companies that are developing more than 20
rockets, many using liquid propellants. Of the launch
vehicles being developed, at least seven are expected to
have a first launch in 2020 or 2021.
“It’s important to understand the
government policy decisions that are driving industry
trends in China,” said Steve Bochinger, Chief Operating
Officer, Euroconsult. “When the National Development and
Reform Commission added satellite internet as one of its
“new infrastructures” to be developed, it triggered a
flurry of private investment. While the majority of the
Chinese space industry is domestic-focused, there is
also an increasing emphasis on internationalization,
with this expected to accelerate as China rolls out more
global space infrastructure.”
China has built out significant
space infrastructure over the past 5-10 years, including
the BeiDou satellite navigation constellation, the
Gaofen Earth observation constellation, and coming LEO
broadband constellations. It has a clear strategy for
internationalizing this infrastructure to provide
turnkey service in regions including Eurasia, Africa,
and Latin America.
|