The Zhitong Finance App learned that Huajin Securities published a research report saying that the rapid development of satellite communication technology has spawned the arrival of a wave in the satellite Internet industry. Currently, satellite Internet has become a key strategic field for national information infrastructure construction and competition among major countries in the information age, and the digital security and cybersecurity issues it faces are gradually becoming prominent. With the cross-domain integration of satellite security and network security, opportunities for the development of the satellite Internet security industry are coming. We are optimistic about companies with state-owned backgrounds, product capabilities, and benchmark customer advantages.

Focus on targets: Jiayuan Technology (301117.SZ), Telecom Network Security (002268.SZ); related targets: Kai Ming Chen (002439.SZ), An Heng Information (688023.SH), Qianxin (688561.SH), Shengbang Security (), Green League Technology (300369.SZ), and Ji Da Zhengyuan (003029.SZ). 688651.SH

The views of Huajin Securities are as follows:

From a security domain perspective, the main security threats facing the satellite Internet involve various fields such as communication link security, terrestrial system security, satellite and payload security, supply chain security, and user terminal security.

Among them, the three security domains of communication links, terrestrial systems, and supply chains are currently the most important attack targets facing the satellite Internet. Attack methods mainly include interference, link hijacking, exploits, eavesdropping, and malicious programs. Among them, interference, link hijacking, and exploiting exploits are the most common attack methods.

From the perspective of security products, satellite Internet security products mainly include communication encryption authentication, intrusion detection and prevention, cyber attack resilience testing, supply chain risk management, and log systems.

Among them: 1) Communication link security: security involving uplinks, downlinks, and inter-satellite links, mainly encryption and authentication products; 2) terrestrial system security: there are many types of products, including firewalls, security gateways, as well as space-borne intrusion detection and prevention systems, space-borne log systems, etc. suitable for satellite Internet; 3) Supply chain security: mainly covering the security of satellite system development, follow-up testing and verification, and security management of suppliers, third party agencies, etc., products include space ranges, multi-factor authentication, etc.

The main participants in satellite internet security include not only professional satellite security vendors, but also national defense contractors and military enterprises.

Among them, professional satellite security manufacturers mainly use encryption products, while defense contractors and military units cover a wider range of products, and can integrate security functions into satellite communication equipment and deliver them to customers in the form of solutions. Domestic Internet security vendors can be divided into two categories based on their corporate background: 1) National teams represented by Telecom Network Security and Aerospace Jiangnan. Among them, Telecom Network Security is backed by China Telecom and Aerospace Jiangnan is backed by the Fifth Aerospace Academy. The national team has certain advantages in obtaining turnkey projects. For example, Telecom Network Security is a general contracting unit to provide cryptographic security products for Star Network, with a contract amount exceeding 20 million yuan; 2) Private satellite security vendors represented by Jiayuan Technology have advantages in terms of product technology and benchmark customers, and are also important participants in the satellite security market.

The competitiveness of domestic satellite Internet security vendors is mainly reflected in product capabilities and benchmark customers.

1) Satellite security products need to have high reliability for encryption, certification and inspection in the space environment: since the space environment has characteristics such as high radiation, extremely low temperature, or extremely high temperature, compared to the terrestrial environment, it is easy to cause a series of problems such as single-particle rollover of semiconductor devices, which in turn can cause safety equipment to fail. Therefore, satellite security manufacturers need to have relevant technologies such as satellite anti-radiation software and hardware platform development, interplanetary link encryption, etc., and can meet a series of hard requirements deployed on satellites; 2) Benchmarking customers and benchmarking projects are the foundation for rapid market expansion in the future. Among them, power network security, Jiangnan, aerospace The products have entered the supply chains of major satellite operators such as China Star Network and China Satellite Communications, and Jiayuan Technology has also become a supplier to major military factories in the field of digital communication network security, and has established a certain first-mover advantage in terms of benchmarking customers.

Market size estimation: In 2024-2027, China's satellite Internet security market will increase in size by 7 billion yuan.

1) According to Jiayuan Technology's prospectus, it is estimated that during the “14th Five-Year Plan” period, the total demand for satellite security will be about 69-13.8 billion yuan, that is, the current average annual satellite security market size is about 14-28 billion yuan; 2) According to incomplete statistics, according to the application plans submitted by various companies to the International Telecommunication Union (ITU), the number of small satellites in China is estimated to reach about 14,000 by 2027; 3) Combined with NSR's forecast of network security expenditure for a single satellite and satellite manufacturing costs, it is conservative to assume that the average security expenditure for a single satellite is 500,000 yuan, or a new increase in 24-27 years 7 billion satellite Internet security-related requirements.

Risk warning: The progress of satellite construction falls short of expectations; the progress of satellite launch falls short of expectations; demand for satellite Internet security has grown less than expected; market competition has intensified; and the introduction of relevant policies has fallen short of expectations.