Starship triple-flown successfully, and the fourth mission is expected to verify recycling technology: On March 14, 2024, Starship successfully conducted a third test flight, but recycling was not achieved. Musk posted an article on the X platform at 13:40, congratulating the Starship team, saying that the Starship “has reached orbital speed.” The Starship has gone through a total of three test flights, and the four-flight will become an inflection point to verify recycling technology. In the first test flight on April 20, 2023, the Starship successfully verified the rationality of the rocket structure. It exploded and disintegrated at an altitude of 39 km after about four minutes of lift-off; on November 18, 2023, the second test flight failed, and the rocket exploded 3 minutes after liftoff and flew to an altitude of 148,000 meters; on March 14, 2024, Starlink's third test flight was successful, verifying the Starship's core capability to deploy satellites, but no recycling was achieved. According to SpaceX President Gwen Shortwell, on May 3, 2024, Starship is expected to conduct a fourth test flight and verify recycling capabilities.
Benefiting from global satellite network coverage, receiver penetration increased: Starlink satellites are deployed in low-Earth orbit to provide coverage of the global network. Satellite communications require a lot of power, and Starlink terrestrial receivers are essential for signal transmission. The transmission power of the Starlink terrestrial receiver can reach 2.44W, while the maximum transmission power of a mobile phone directly connected to a satellite is between 23 and 26 dbm (0.2 to 0.4 W). More satellites entering orbit have increased global internet coverage and more data transmission bandwidth, and each Starlink V2mini satellite provides 80 Gbps of speed. The higher bandwidth can accommodate more ground receiving devices, and the ground receiver penetration rate is increased. Starlink had over 2.3 million active users in December 2023.
Starlink launch reduces costs and accelerates Starlink planning: Starship core's rapid reuse capability reduces payload costs and time costs. Using “fuel tanks” to refill fuel in space, “fuel tanks” can carry up to 100 tons of fuel at a time. Use liquid oxymethane as an unfueled fuel to reduce fuel costs. Starship's carrying capacity exceeds that of other super-heavy launch vehicles, greatly reducing unit transportation costs. The Starship's LEO payload can reach 150t-200t. The high LEO payload and extremely low launch interval enable Starship to effectively accelerate the increase in the number of Starlink satellites and accelerate the Starlink program. The Starship's unit transportation cost is more than 90% lower than the Falcon 9, and the shortest launch interval is about 1 hour.
Starlink abandons optical fiber cables to achieve a more cost-effective communication solution: Due to the characteristics of Starlink space-ground-user connections, Starlink can eliminate the cost of laying optical fiber optic cables, which is lower than 5G per capita cost. Based on data such as total base station construction cost, signal coverage radius, and population density, it is possible to estimate the unit construction cost (per capita cost) of the three types of network services. The per capita cost of Starlink is 48 yuan/person, the per capita cost of 5G base stations is 4,063 yuan/person, and the per capita cost of 4G base stations is 25 yuan/person.
Profit forecast and investment rating: As part of the company's business was affected by a decline in share in 2023, we lowered the company's earnings per share to 0.57/0.79 yuan for 23-24, and the company is expected to be 1.34 yuan in 2025. The company is a leading manufacturer of consumer electronics RF and structural components. In the future, the company's connectors are expected to be released as Starlink receivers are released, and the company's valuation is 30 times lower than the comparable company's 24-year average PE valuation, maintaining a “buy” rating.
Risk warning: Satellite launches fall short of expectations, changes in technology research and development stability, market-based mechanisms fall short of expectations, and business development falls short of expectations.