As Mainland China and Hong Kong have successively lifted several anti-epidemic measures, the economy is back on the normal track. Many companies are actively expanding new businesses to optimize their balance sheet. Among them, Hong Kong Aerospace Technology Group (HKATG; 1725. HK) announced after the market closed on 14 December, announcing the renaming of the indirect wholly-owned subsidiary, and plans to cooperate with various independent third parties in areas such as development and manufacturing of commercial satellites, satellite communication, satellite monitoring, control and data receiving, and intelligence applications of satellite data. The expanding the business scope, the Group expects to capture a share of the satellite communications market worth over US$ 20 billion.
According to the announcement, the Group’s indirect wholly-owned subsidiary, namely “Hong Kong Satellite Manufacturing Limited” will be renamed as “Aspace Satellite Technology Limited) (“Aspace”), and plans to engage in satellite manufacturing (such as development, design and testing of satellite payloads, communication satellites, navigation augmentation satellites and remote sensing satellites), satellite communications (including integrated satellite Internet communications) application services) and satellite launch (provide commercial launch sites and launch test services for commercial satellites) together with Aspace. The management of the group believes that these changes will benefit the expansion of its existing aerospace business, and at the same time enhance its market awareness and brand effect.
New Trends in Satellite Communications
According to ABI Research, by 2030, the global satellite communication service revenue will reach 141 billion US dollars. Although the world will be impacted by the pandemic in 2020, telecom operators in various countries have not slowed down the construction of 5G network infrastructure; as of July 2021, there are 177 commercial 5G telecom operators in the world, of which coverage and penetration rate of the Chinese market ranks first in the world, with more than 500 million users. However, the application services on the consumer side of satellite communications have not yet seen breakthrough development, so there is still considerable room for development in this area.
At present, satellite communication revenue mainly comes from satellite TV. Due to breakthroughs in LEO technology and the gradual realization of the Starlink project in recent years, the market size of global commercial low-orbit satellites is estimated to exceed US$ 50 billion. Some people may think that satellite communication is somehow unreachable it has already been applied in our daily life. The iPhone 14 released by Apple in September introduces Emergency SOS via satellite, and the Huawei Mate 50 allows users to send short messages and map out routes using the BeiDou navigation satellite system. What’s more, Xingji Shidai Technology Co. Ltd held by Chinese automaker Geely Holding also plans to launch mobile phone products that can be connected to low-orbit satellite communication technology next year. These new market trends show that satellite communication will become a major direction for future smartphones.
Low-cost advantage
The higher the altitude, the fewer the number of satellites required to obtain full earth coverage, but it is usually more costly to launch satellites to higher altitudes. With the significant reduction in rocket launch costs and the continuous upgrading of satellite precision manufacturing technology, the current cost for low-orbit satellite manufacturing has been fully reduced, coupled with the maturation of satellite communication services supported by mobile phones, low-orbit satellites have become an important solution for the current commercial aerospace industry ecology.
HKATG is a leading enterprise in Hong Kong’s “space economy”, its satellite intelligent manufacturing center located in the AMC Premises adopts flexible, intelligent, and mass production methods to greatly reduce costs and improve efficiency at the same time. During the year, HKATG signed strategic cooperation agreements with several organizations. One of the partners, D-Orbit, has offices in Italy, the United Kingdom, Portugal and the United States. It focuses on the development, manufacture, and operation of the space vehicle ION satellite carrier, and offers state-of-the-art logistics technology and transportation solutions; the partnership will help HKATG optimize operating costs and improve satellite manufacturing technology. In the future, its subsidiaries will fully develop a satellite communication business, which will help the group to expand its territory in the Greater Bay Area Smart cities and the global commercial aerospace market.