Huaxi Securities: Global commercial aerospace value restructuring transformation from single-use manufacturing to a reusable model

The Zhitong Finance App learned that Huaxi Securities released a research report saying that the commercial aerospace sector is currently undergoing a model transformation from one-time manufacturing to reuse costs. Companies represented by SpaceX continue to reduce unit costs by increasing reuse rates and launch frequencies, and China's commercial aerospace is also accelerating technological breakthroughs and cost convergence. The industry presents an oligopoly pattern, and downstream launch service providers use order advantages to control the voice of the supply chain. The investment direction covers fields such as rocket manufacturing, core components, and space computing power.

Huaxi Securities's main views are as follows:

Commercial Aerospace Cost Reengineering: Model Transition from One-Time Manufacturing to Reuse Costs

Currently, the global commercial space launch sector is undergoing profound cost restructuring. At the cost structure level, traditional rockets are dominated by disposable hardware manufacturing, accounting for about 67%, while emerging commercial rockets reduce the share of hardware costs to about 24% through reusable design, forming a sustainable model of “reuse for cost.” Among them, the specific cost of the rocket level is split. The booster accounts for 60% of the total cost of the rocket, the second stage accounts for 20%, the fairing accounts for 10%, and the launch operation itself accounts for 10%. Looking at the trend of cost evolution, domestic and foreign commercial space companies are promoting cost optimization based on different development paths. Through more than ten years of technology accumulation, companies represented by SpaceX have formed a continuous optimization model of “increasing the degree of reuse - increasing the frequency of transmission - decreasing unit cost”. At the same time, Chinese commercial space companies are speeding up technological breakthroughs and cost convergence, making positive progress in independent model development and large-scale application, showing a trend of systematic catch-up.

Global launch volume is directly redeemed to launch service providers and complete arrow manufacturers, with indirect benefits from core reusable components and high-frequency replacement parts

Launch service providers directly receive cash income from single launch costs and high-frequency missions. The higher the frequency of transmission and the larger the amount of a single contract, the greater the profit flexibility of the launch process. In the context of the release of launch demand, launch services and full arrow delivery are directly customer-facing billing links. Revenue corresponds to the number or presentation of launch missions, directly benefiting from the large launch volume background. In addition, high-value components such as the first stage and fairing have been rotated and used many times, putting forward higher reliability and maintenance requirements for reusable assemblies such as engines, main structures, and control systems, driving indirect demand for related parts and maintenance services.

The 2024-2025 launch market shows an absolute oligopoly pattern, and the order monopoly gives downstream jurisdiction over the supply chain

The global and Chinese space launch markets are characterized by unipolarization. Launch service providers use the order hegemony established in recent years to intervene in the production layout of the upstream supply chain. Downstream giants seize pricing power, which may force upstream enterprises to cooperate with their supply chain restructuring strategies. Upstream companies need to passively accept capital expenditure and production line adjustments to maintain market share. Not only is the dependence of core suppliers on a single giant not scattered due to commercial aerospace development, but instead remains high due to increased head effects.

Investment suggestions: Rockets: Aerospace Dynamics, Chaojie Co., Ltd., Western Materials, Aerospace Mechatronics, Aerospace Hongtu, Gaohua Technology, Aerospace Electronics, etc.; Space Computing Power: Shunhao Co., Ltd., Putian Technology, Unitech, Zhongke Xingtu, Jiayuan Technology, etc.; SpaceX: Western Materials, Xinwei Communications, Zaisheng Technology, Sirui New Materials, Tongyu Communications, etc.

Risk warning: 1) macroeconomic downside risk; 2) increased industry competition; 3) progress in technology development and application falls short of expectations; 4) demand falls short of expectations, etc.