[Featured Stock] Contec, $1.1 Trillion NewSpace Era Arrives... The World's Only Company Makes Full-Scale Debut

Contec, which plummeted compared to the public offering price on its first day of listing, is rebounding.

At 10:02 a.m. on the 10th, Contec was trading at 18,280 KRW, up 14.82% from the previous day.

Contec was listed on the KOSDAQ market at a public offering price of 22,500 KRW the day before. On its first day of listing, it closed trading at 15,920 KRW, down 29.24% from the public offering price.

Contec is a startup that processes the transmission and reception of space ground station data. The space industry is divided into 'upstream,' which produces satellites and launch vehicles, and 'downstream,' which combines fourth industrial revolution technologies such as artificial intelligence (AI), 3D printers, satellite imagery, and communications. Contec is a downstream company that provides ground station services and satellite image preprocessing and application services. Contec is the only company in the world that covers all areas of the downstream sector.

Si-on Kang, a researcher at Korea Investment & Securities, explained, "It is the only company in Asia that owns a private ground station," and "based on its infrastructure, it has established a business model in the downstream sector, which accounts for 90% of the space market size." He added, "The ground station system engineering solution, which accounts for the highest sales proportion, occupies most of the domestic ground station construction market based on its self-developed ground station operation software."

He analyzed, "The GSaaS network solution is a subscription-based business model that charges $55 to $120 per session each time data is received from satellites," and "the number of service satellites has continuously expanded from 12 in 2020, the first year of business launch, to 75 currently."

Contec plans to expand its business by using Jeju Island as a major base for space ground station infrastructure. It is establishing the largest private space ground station in South Korea in Sangdae-ri, Hallim-eup, Jeju City. It plans to first install five satellite antennas and add seven more antennas by 2024, operating a total of 12 antennas.

Seonghee Lee, CEO of Contec, said at the pre-listing IPO press conference, "Our goal is 70.4 billion KRW in sales and an operating profit margin of over 27% by 2025," adding, "We are entering the 'quantum jump' phase of full-scale performance."

U.S. Morgan Stanley forecasted that the global space industry will grow from $385 billion (approximately 504 trillion KRW) in 2020 to $1.1 trillion (approximately 1,441.99 trillion KRW) by 2040. The government is actively pursuing satellite development and data acquisition. According to the mid- to long-term space development plan from 2014 to 2040, the government aims to independently develop satellites that can support domestic demand.

The number of satellites worldwide is currently about 3,000 and is expected to increase more than fivefold over the next decade. Due to the increase in satellites, ground stations, which are essential for data reception, have technical and cost limitations when built and operated directly by private companies. Demand for services utilizing ground stations built worldwide by Contec is expected to explode in the future. Contec provides turnkey solutions covering all areas from design, construction, to operation of space ground stations for satellite data transmission and reception. The integrated ground station monitoring and control software developed by Contec is also used in all ground stations of the Korea Aerospace Research Institute.