Reform Towards Inclusiveness｜New STAR Market Policies Boost Commercial Space Industry

Shanghai Securities News   Liu Yihe

"The fifth set of listing standards is not only a new option to us, but also a hope to accelerate our company's IPO process," said Wu Xinggui, Deputy General Manager of Spacety. He noted that the company and its sponsoring broker have already begun evaluating the applicability of the new policies. With clearer IPO exit expectations, enthusiasm in the primary market is being reignited. Several companies disclosed that existing shareholders have proposed additional investments, while new institutional investors are actively reaching out. Since the founding of the first batch of commercial space enterprises in 2015, favorable policy trends have gradually emerged and the industry has grown rapidly. However, due to sustained high R&D investment, the absence of near-term profitability, and a lack of IPO precedents, listing has remained a persistent challenge.

The recently issued Opinions on Establishing a Sci-Tech Growth Tier on the STAR Market to Enhance Institutional Inclusiveness and Adaptability includes commercial space enterprises under the fifth set of listing standards, directly addressing the profitability challenges faced by these companies. In response, relevant enterprises have promptly begun preparing for IPOs. Over the past two years, commercial space has been consistently featured in the Government Work Report. The primary market has seen record-high fundraising, while key breakthroughs have been achieved in satellite constellation deployment and reusable rocket technologies. With the combined momentum of policy support, capital inflows, and industrial growth, the STAR Market is bridging critical gaps in the secondary market, injecting new impetus into the trillion-level commercial space industry.

"A Tangible Breakthrough"

As a satellite manufacturer and data service provider, Spacety has raised nearly 1 billion yuan in funding since its establishment in 2016. In 2024, the company generated over 200 million yuan in revenue and reached a valuation of over 4 billion yuan, yet it has not achieved profitability. From an IPO standpoint, regulators have taken a cautious approach toward unprofitable companies. For early-stage commercial space enterprises, only the second of the first four sets of listing standards—which requires annual revenue of 200 million yuan and a minimum market capitalization of 1.5 billion yuan—is realistically attainable. However, rocket companies can hardly meet the criteria, and even satellite companies only just manage to qualify.

In 2024, commercial space was listed as a "new growth engine" for the first time, with special policies introduced in Beijing, Shanghai, and other regions. In April of this year, Shanghai Stock Exchange (SSE) held a symposium with 10 leading commercial space companies to discuss ways the capital market can support the industry, sending clear signals of backing. "The new policy introduced after the meeting has not only boosted confidence but also genuinely opened the path to listing," said a representative from a leading rocket company.

Currently, leading rocket companies have all completed their shareholding reforms, with Interstellar Glory (iSpace) being the only rocket company to have entered the official listing counseling and filing process, disclosing its latest progress in April this year. Industry insiders expect rocket companies to accelerate their IPO processes within the year, while satellite companies are anticipated to begin filing in succession next year. Deep Blue Aerospace stated that going public will broaden direct financing channels, stimulate social capital enthusiasm, and bring cross-sector collaboration opportunities to the industry. Minospace highlighted that listing can attract long-term capital, supporting R&D investments and the mass production of satellites.

Promising Prospects but Funding Support Still Needed

SpaceX has demonstrated the commercial viability of the space industry's business model: its Starlink constellation has launched over 7,500 satellites, serving more than 5 million users worldwide. The company turned profitable starting in 2023 and is projected to generate $15.5 billion in revenue by 2025. Its income streams come from rocket launches, satellite internet services, and government contracts. The key to reducing launch costs lies in rocket reusability — in 2024, the Falcon 9's first stage was reused more than 20 times. The next-generation Starship is advancing toward two-stage reusability, with the goal of enabling transportation to the Moon and Mars.

However, since its founding in 2002, SpaceX has invested tens of billions of dollars, exemplifying the commercial space industry's characteristics of "high technology, high investment, high risk, and long cycles". China's commercial space sector is still in the investment phase: Deep Blue Aerospace has completed multiple funding rounds and is currently advancing its Series B5 financing, with funds allocated to building a full-chain industrial base; Spacety’s vertically integrated model covers the entire process from satellite manufacturing to operations, requiring continuous investment to reduce costs and improve efficiency.

Investors have clear expectations regarding milestone achievements. Mao Xiaoyong from CHINAHOPE Asset Management pointed out that some rocket launches serve both as technical validations and as accountability to investors. However, rushing to achieve results can increase risks—companies like SPACE PIONEER have experienced launch failures. The industry needs to maintain tolerance for failures, strengthen safety supervision, and, more importantly, secure sufficient funding to avoid "compromised operations". Moreover, talent scarcity in commercial space requires companies to implement equity incentives through listing and financing to stabilize their core teams.

New Policies Respond to Critical Industry Milestones

China's commercial space industry has reached a crucial turning point: in 2024, the first satellites of the "Qianfan Constellation" and "Guowang Constellation" were scheduled for launch, both aiming to build constellations with tens of thousands of satellites, signaling the approach of high-frequency launches and mass satellite production. Several reusable rockets are also expected to have their maiden flights this year, marking the transition for companies from an "investment accumulation period" to a "commercial harvest period". Deep Blue Aerospace revealed that it has completed key breakthroughs in rocket recovery technology and plans to launch the Nebula-1 rocket for its maiden flight before the end of this year, with commercial operations commencing next year.

Who can seize the listing opportunity? A regulatory insider indicated that this year is a peak period for rocket launches, with launch results directly reflecting technological progress. Equally important are a company's internal controls and the readiness of its IPO preparations. Wu Xinggui from Spacety believes that satellite companies need to complete a closed loop between their business operations and commercial models, with the success of their models depending on market and investor recognition. Xia Chao from Sci-Tech CAP prefers to invest in satellite enterprises with unique application advantages, as such projects tend to command higher unit prices and gross margins.

Benchmarking against SpaceX, cost reduction is the core focus. Mao Xiaoyong pointed out that some companies have already passed the "cash burn" phase, with technology becoming increasingly mature, and attention should be given to enterprises achieving breakthroughs in cost control. At the same time, companies' self-sustaining capabilities are gradually emerging: Minospace secured an 800 million yuan contract for constellation construction, which will provide remote sensing data services to Meishan, Sichuan. Deep Blue Aerospace plans to adopt a dual-driven approach of "main business revenue + capital financing" to support subsequent R&D investment.