Looking ahead to 2025, the domestic Satellite Internet will enter the industrialization stage. From the perspective of investment certainty and sustainability, Satellite Internet will be the most promising growth segment in the next five years.
According to the Zhito Finance APP, Dongxing released a Research Report stating that the first batch of G60 Starlink network satellites will be successfully launched in August 2024, and the low orbit 01 group of China's Starlink satellite Internet will be successfully launched in December. This marks the official entry of the two major constellations in the country into the construction phase of low orbit Internet constellations, and the satellite Internet is entering the industrialization stage, with the most significant marginal changes. Looking ahead to 2025, domestic satellite Internet will enter the industrialization phase. From the perspective of investment certainty and sustainability, satellite Internet will be the most growth-oriented segment in the next five years. Bullish on new technology suppliers under trends such as ground-space integration, satellite bases, and high integration of low orbit satellites, suggestions are made to pay attention to symbols related to the satellite Internet Industry Chain.
The main viewpoints of Dongxing Securities are as follows:
The communication Industry Chain can be divided into: 1) wired and wireless communication networks primarily invested in and constructed by operators; 2) AI computing power Industry Chain invested in by operators and large model manufacturers; 3) and integrated applications that combine communication networks with industries, specifically including the Internet of Things, Vehicle Networking, Industrial Internet, enterprise communication, and satellite Internet.
Satellite Internet has become a strong competitor to 5G networks and fixed broadband.
Companies represented by SpaceX and others are beginning to dominate the construction of new satellite Internet. The construction of satellite Internet is gradually entering the broadband Internet era, with more complementary cooperation and integrated development with ground communication systems. Compared to 5G networks and fixed broadband, Starlink can provide broadband connections to remote areas and regions with insufficient coverage of traditional Internet infrastructure by deploying a low orbit satellite network with global coverage. Although the overall network performance of "Starlink" still lags behind 5G networks/fixed broadband, the download speed of the Starlink network is already at a relatively high level.
The core network is an important equipment component of the ground-space integrated communication architecture.
The satellite-ground integrated communication network merges satellite communication with ground mobile communication through technical means, becoming a trend in the industry. The core network of the satellite-ground integrated communication network includes user data types, control plane types, and user plane types, among other network elements. Currently, the satellite regeneration model is an important technical direction of the 3GPP R19 NTN standard, and some network elements in the core network's control plane and data plane need to be placed in orbit. Implementing the core network in orbit allows for in-orbit data forwarding services, which helps reduce latency and achieve efficient business distribution.
Under the satellite station mode, various technologies are undergoing optimization or new development.
(1) The integration of 5G and satellites is one of the important development goals. Xinke Mobile ranks fifth in the number of patents in the 5G non-terrestrial network patent family and has a unique first-mover advantage in the satellite Internet field.
(2) Phased array antennas are one of the core payloads of low Earth orbit satellites. Multi-beam phased array antennas utilize a beamforming network to simultaneously achieve multiple independent high-gain beams, offering high flexibility and wide-angle scanning. According to disclosures by Galaxy Aerospace, the first domestic batch of satellite-mounted millimeter-wave AiP (Antenna In Package) watt-class multi-beam phased array antennas will be completed in August 2024.
(3) Laser inter-satellite links have become the mainstream technical solution for inter-satellite routing. Currently, Starlink has adopted laser inter-satellite links as one of its core transmission methods. Domestic constellations such as ‘Star Network’, ‘Hongyan’, ‘Hongyun’, ‘Xingyun’, and ‘Heaven and Earth Integration’ are also actively applying laser inter-satellite links to low Earth orbit satellite constellations.
With the trend of high-integration and miniaturized deployment of low Earth orbit satellites, three-dimensional heterogeneous integration micro-system technology will achieve wide engineering application in satellite payloads.
Three-dimensional heterogeneous integration decomposes functional circuits onto silicon-based substrates or compound material substrates, achieving high-density integration through silicon vias, and is one of the main supporting technologies for the miniaturization, high performance, and low cost development of low Earth orbit satellites. In the phased array field, applying this technology can achieve three-dimensional integrated integration of heterogeneous RF chips and passive transmission structures and antenna array elements, as well as high-performance hermetic packaging, and modular low-cost rapid assembly capabilities.
Investment strategy: In 2025, the domestic satellite Internet will enter the industrialization stage. From the perspectives of investment certainty and continuity, the satellite Internet will be the most growth-oriented sub-sector in the next five years. Bullish on new technology suppliers under the trends of satellite-ground integration, satellite station, and high integration of low-Earth orbit satellites.
Relevant symbols in the Satellite Internet Industry Chain: Xinke Mobile (688387.SH), Zhenlei Technology (688270.SH), Jushri Technologies, Inc (300762.SZ), Chuangchang Technology (001270.SZ), Guangzhou Haige Communications Group Incorporated (002465.SZ), Guobo Electronics (688375.SH), Hwa Create Corporation (300045.SZ), Leidian Weili (301050.SZ), Cetc Potevio Science&Technology (002544.SZ), Guangdong Shenglu Telecommunication Tech. (002446.SZ), Tongyu Communication Inc. (002792.SZ), Genew Technologies (688418.SH).
Risk warnings: (1) changes in the international environment; (2) AI development not meeting expectations; (3) intensified market competition; (4) weakened downstream demand; (5) construction progress of low-orbit satellite constellations not meeting expectations.