Nationstar Aerospace is aiming to be the first commercial aerospace stock in Hong Kong stock market, with a valuation of 6.5 billion but a loss of over 440 million yuan in three years. On the one hand, there is the halo of AI satellite technology, and on the other hand, there are the problems of customer dependence and profitability. Can this IPO solve the industry’s dilemma?
01
Nationstar Aerospace goes public in Hong Kong with AI satellite and “Star Computing Plan”
In January 2025, Nationstar Aerospace officially submitted a listing prospectus to the Hong Kong Stock Exchange, with Guotai Junan International and CCB International serving as sponsors and coordinators. If successfully listed, Nationstar Aerospace will become the “No. 1 commercial aerospace stock” in the Hong Kong stock market.
NationStar Aerospace was established in 2018 and focuses on the R&D and application of low-orbit satellites. Its core businesses include AI application satellites, AI intelligent computing satellites and “star computing plans”.
①
AI application satellite
: Equipped with AI payloads to realize real-time processing of on-board data and improve remote sensing efficiency;
②AI intelligent computing satellite
: Provide edge computing power in space and promote “computing in days and days” (on-orbit processing of space data).
③
star calculation plan
: A space-based computing network consisting of 2,800 AI intelligent computing satellites will be built by 2030. It has been approved and announced by the International Telecommunications Union for orbit and spectrum, and plans to launch the first batch of 12 satellites in 2025.
Picture: “Star Computing Project” global press conference Source: NationStar Aerospace
In terms of revenue in 2023, Nationstar ranks second among private aerospace companies that manage a complete satellite industry chain, with a market share of 1.9%. If only satellite business revenue is counted, it ranks eighth, highlighting the imbalance between its technological advantages and commercialization capabilities.
Figure: China’s top ten private satellite companies in satellite business in 2023 Source: NationStar Aerospace Prospectus 02 Survival Crisis Under the Appearance of High Growth Today, Nationstar Aerospace uses AI satellites as its selling point and has created a “capital myth” with a valuation of 6.5 billion in only 6 years since its establishment. However, financial data reveals a deep-seated crisis.
1. Revenue growth declines
From 2022 to the first three quarters of 2024, revenue was 177 million yuan, 508 million yuan and 237 million yuan respectively. The growth rate plummeted from 187% to -53%, and the growth momentum was obviously exhausted.
Figure: Revenue of each main business of Nationstar Aerospace Source: Nationstar Aerospace Prospectus 2. Losses continued to expand. Net losses during the same period were 91 million yuan, 139 million yuan, and 214 million yuan, with a cumulative loss of approximately 444 million yuan. The gross profit margin of the satellite business will drop to -107.1% in 2023, and each satellite will be sold at a loss.
Figure: Nationstar Aerospace’s revenue Source: Nationstar Aerospace prospectus
3. Cash flow is tight
As of the end of September 2024, the book cash is only 111 million yuan, which is only enough to support half a year of operations at the current cash burn rate.
03
The high “ticket” for commercial aerospace
1. Satellite costs are high
①
Aerospace grade components
The price is high, dozens of times higher than that of civilian products, constituting a core cost burden.
②
Shenzhen Satellite Research and Development Center
It has not yet been put into production, and mass cost reduction is still stuck in the blueprint, with no short-term results.
Figure: Nationstar Aerospace subsidiary builds satellite factory in Baoan, Shenzhen Source: Heyi Industrial Operations 2. R&D investment backfires on profits. R&D expenditures accounted for 44.3% in the first three quarters of 2024, far exceeding the industry average, and the rate of capital consumption far exceeds revenue growth.
3. Controversy over founder’s high salary
Founder Lu Chuan
Salaries in the first three quarters of 2024 cause controversy
, far more than other executives. Although his technical leadership is recognized, in the context of the company’s expanding losses, the inversion between high salary and performance has raised questions.
Picture: Lu Chuan, founder of Nationstar Aerospace Source: Nationstar Aerospace
4. Customer concentration risk
The top five customers contribute 92.7% of revenue
, the largest customer accounts for 73%. Related party Beijing Carbon Stop Technology (the actual controller is also Lu Chuan) is both its third largest customer and supplier, with revenue of 9.368 million yuan in 2022, accounting for 5.3% of Nationstar Aerospace’s total revenue. The corresponding business is “smart parking solutions”, and the related business will start in 2021.
Figure: Basic customer information Source: Nationstar Aerospace prospectus
04
Technical advantages cannot cover up commercial shortcomings
1. Technical achievements and market limitations
①
Up to now, Nationstar Aerospace has jointly developed 6 traditional remote sensing satellites and 1 AI application satellite with its partners; it has independently developed 6 AI payloads, 4 AI application satellites and 4 AI intelligent computing satellites, and has successfully completed 13 space missions, including the world’s first in-orbit AI large model satellite.
Picture: The world’s first AI large model scientific satellite Source: China Science and Technology Network
②
The first three quarters of 2024
Satellite based solutions
business contribution
Over 80% of income
, customers are concentrated in governments and large institutions, and the civilian market has not been opened.
Figure: Satellite industry value chain Source: Nationstar Aerospace Prospectus
2. Concept implementation lags behind
“Space Edge Computing
“Still stuck in the laboratory stage, the To C business model has not yet been fully operational, and attempts such as smart parking contribute less than 5% of revenue.
3. Poor market environment
①Domestic counterparts:
Leading private remote sensing satellite
Changguang Satellite
Due to continued losses and sanctions risks, the IPO was withdrawn at the end of 2024; companies within the system, such as China Satellite, lost 14.7406 million yuan in the first three quarters of 2024, and their commercialization capabilities are still insufficient.
②International competition:
SpaceX Starlink
Deployed
Over 7,000 satellites
, occupying the advantage of low-orbit orbit resources, Nationstar Aerospace’s 2,800-plane plan is facing resource competition and cost pressure.
Picture: Starlink has launched more than 7,000 satellites Source: Notebookcheck05 How does Nationstar Aerospace break the situation?
1. Cost breakthrough
①
On-board AI processing
Reduces data return bandwidth requirements
90%
, if applied on a large scale, the cost can be reduced by 40%.
②Shenzhen Satellite Research and Development Center
accelerate
Once put into production, the annual output of satellites will exceed 100, which is expected to dilute R&D and manufacturing costs.
2. Policy dividends
① “Commercial aerospace” will be included in the government work report for the first time in 2024. Chengdu and other places will launch special subsidies. The industry is expected to receive tax incentives and procurement preferences.
②
Promote AI satellite technology standards through the International Telecommunications Union to avoid spectrum competition pressure.
3. Diversified layout
①
participate
National Low Orbit Satellite Internet Project
, share the risk of R&D investment.
② Deep cultivation
smart agriculture,
Logistics monitoring
Waiting for trillions
The civilian market reduces dependence on government orders.
③ exert force
Overseas business
, providing satellite and complete solutions.
Summarize
The IPO of Nationstar Aerospace is not only a breakthrough attempt in the commercial aerospace industry, but also the ultimate test of the sustainability of its business model. The triple resonance of technological leadership, capital patience and market demand may become the key to breaking the situation. However, under the industry logic of “burning money for growth”, how to balance short-term losses and long-term value is still a difficult problem that all participants must answer.
