Space Economy: From 'Stargazing' to 'Real Profits' - A Dialogue with the Fund Manager: Deconstructing Core Assets in the Space Industry Chain

Clarification of the Scale and Misconceptions of the Space Economy (00:12:35 - 00:19:00)

Space represents a market opportunity growing at a double-digit annual rate and reachingUSD 1.8 trillionfar beyond just rockets and satellites. The space sector is giving rise to new business models, including service businesses with recurring revenue streams.

Two major misconceptions:1. Space is not narrow; it permeates almost every industry, including communications, defense, agriculture, and payment systems. 2. Space is not entirely new; innovation has spanned decades, but today’s technological and policy advancements have created an investment turning point.

Revolution in Launch Costs: Reusable Rockets Initiate a New Commercial Era (00:19:00 - 00:21:20)

Launch costs have plummeted from $20,000 per kilogram in the 2000s to less than $2,000 today, driven primarily by the reusability of SpaceX's Falcon 9 boosters.

Acceleration in Defense Spending: Space Becomes the Ultimate Strategic High Ground (00:21:20 - 00:24:30)

Global defense budgets are growing rapidly (the US Space Force budget increased from $15 billion to $70 billion), and space plays a rising role in areas such as drone warfare and missile interception. For example, during the Ukraine conflict, approximately 170 THAAD interceptor missiles were consumed in the first month alone, reflecting significant cost asymmetry.

Influx of Private Capital: A Wave of Space IPOs (00:24:30 - 00:32:40)

Over the past decade, venture capital investment in the space sector has grown roughly tenfold, driving numerous successful public exits in recent years. Key targets include: $AST SpaceMobile (ASTS.US)$ : Direct-to-satellite communications, aiming to launch 45–60 satellites this year and expecting to achieve positive free cash flow within two years
$Rocket Lab (RKLB.US)$ : Rocket launches—SpaceX uses approximately 80% of its launch capacity internally, with external demand largely served by Rocket Lab
$Planet Labs PBC (PL.US)$ : A leader in Earth observation, shifting its business model from selling raw imagery to offering AI-processed data via sovereign-client subscriptions, with a backlog exceeding $1 billion

In-depth Analysis of SpaceX’s IPO: Valuation Anchoring and Market Impact (00:32:40 – 00:38:00)

SpaceX is expected to go public in Q3 2025, targeting a $75 billion fundraising round and a valuation of $1.5–2 trillion, implying a multiple of over 40x projected 2028 revenue—significantly higher than the current 8–20x multiples for pure-play space equities. The IPO will have dual effects:

Positive factors:It will establish a high-valuation benchmark for the entire space sector, making existing pure-play space stocks appear relatively cheap;

Negative factors:The massive capital raise will temporarily divert funding from other space-related equities. Portfolio managers’ strategy: capitalize on IPO-induced valuation dislocations to increase positions in high-conviction names.

Orbital Computing: Opportunities and Challenges of Putting Data Centers in Space (00:38:00 – 00:40:30)

Current key bottlenecks: launch costs need to fall another tenfold (Starship may achieve this within five years), and thermal management—since convection doesn’t exist in space, heat can only dissipate via radiation. Larger radiators mean greater mass, which increases launch costs. Commercial deployment is still likely about a decade away.

Core Portfolio Breakdown (00:40:30 - 00:46:10)

| Pure Space, Rocket Launch | $Rocket Lab (RKLB.US)$ Evolving from single launches to an end-to-end space solutions integrator, recently won the SDA Transport Layer contract

| Pure Space, Earth Observation | $Planet Labs PBC (PL.US)$ Transitioning satellite data + AI packaging into sovereign customer subscription services; capital expenditure peak nearing, profitability inflection point approaching

| Cross-sector, Defense-Space Systems Integration | $Kratos Defense & Security Solutions (KTOS.US)$ Not building rockets, but creating "road infrastructure"—integrating hypersonic, unmanned systems, and weapons systems with space sensing/software coordination

| Diversified Defense Giant | $BAE Systems plc Sponsored ADR (BAESY.US)$ The stable end of a barbell portfolio, strong cash flow, high visibility in earnings; its precision-guided laser weapon has intercepted 40% of Iranian drones

Portfolio Strategy and Outlook (00:46:10 - 00:48:00)

For example,Barbell structureSpace theme allocation: Pure high-growth space stocks (20-30%) + diversified defense giants (70-80%) to balance volatility.

Three future opportunities: Non-US regional exposure (Europe, Japan, South Korea), the integration of space and AI driving expansion in communications and IT sectors, and space as a diversified hedge for AI/technology holdings.

Q&A Session (00:48:00 - 01:02:30)

Q: How can space investments address geopolitical regulatory risks?

The global space landscape is moving towards a dual-track system led by the US and China; the current strategy excludes Chinese exposure, but with a wave of Chinese space companies going public in A-shares between 2026-2027, exposure may increase. The regulatory framework remains in its infancy, mostly following a 'first-come, first-served' logic.

Q: How is customer concentration risk assessed?

If the major client is a sovereign government, long-term contract visibility is strong, making concentration acceptable; if it's a single commercial client, avoidance is recommended. Planet Labs serves as a positive example of transitioning from high concentration to a diversified subscriber base.

Q: With limited low-orbit resources, who regulates illegal occupation?

There is currently no international space regulatory body; regulation mainly depends on technological first-mover advantage and national sovereignty competition. China is building its own Guowang constellation (as an alternative to Starlink), while the EU is independently constructing its satellite network due to sovereignty considerations.

Q: Comprehensive competitors of SpaceX?

There is no end-to-end competitor; in the launch sector, Rocket Lab and Firefly handle small to medium lift capacities; in the direct satellite connectivity space, AST SpaceMobile, GoLAN, and China's State Grid are key competitors; SpaceX xAI currently lags behind top-tier models such as OpenAI and Anthropic in the AI field.

Q: Which segments of the space industry are already generating real revenue?

The launch industry (with strong demand exceeding supply and pricing power) and defense applications (government contracts ensuring stable cash flow) are the core areas that have achieved commercial success; orbital computing power and manned lunar missions remain in the R&D/conceptual stage.

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