AI Next Leading Sector 'Space'... Orders Are Piling Up

Stock Prices of Related Companies Rise Ahead of Space Aviation Agency Opening
Setrec Eye, Intellian Tech, Contec Gain Attention
Competition Among Global Firms for Market Dominance

With the opening of the Space Aviation Agency scheduled for the 27th of next month, stocks related to the aerospace sector continue to rise in the domestic stock market. Market experts predict that investment sentiment will improve as aerospace industry-related events continue not only domestically but also overseas.

According to the financial investment industry on the 25th, the stock price of satellite system developer Satrec Initiative has risen 59% this year up to the previous day. During the same period, the KOSDAQ index fell by 0.5%. Expectations of benefits from the development of the aerospace industry have led to the stock price increase. The stock price of Contec, a ground station operator connecting with satellites, rose about 22%.

The government has appointed Professor Yoon Young-bin of Seoul National University's Department of Aerospace Engineering as the first head (vice-minister level) of the Space Aviation Agency. With the completion of high-level appointments, the launch of the Space Aviation Agency is expected to proceed smoothly. Policy support for fostering the aerospace industry is also anticipated to continue.

The next-generation launch vehicle project promoted by the government aims to develop a launch vehicle capable of large-scale space transportation such as space exploration. A satellite to verify lunar orbit insertion performance will be launched in 2030, followed by the launch of a preliminary model of a lunar lander the following year. After launching the final model of the lunar lander in 2032, a private-led launch service is planned. Companies such as Hanwha Systems, KAI, LIG Nex1, Satrec Initiative, AP Satellite, and Genoco are participating in public projects and accumulating related technologies.

Overseas, SpaceX, OneWeb, and Amazon continue to invest to dominate the low Earth orbit satellite communication market. Seongjo Bae, a researcher at Hanwha Investment & Securities, explained, "They are competing to prepare for the hyper-connected (6G) era," adding, "Numerous Internet of Things (IoT) devices, including smartphones and wearable terminals, are being connected to the internet." He continued, "Development is also underway for urban air mobility (UAM) and autonomous vehicles, which are in the pre-commercialization stage," and added, "Countries are preparing for the hyper-connected era through 6G communication that is unaffected by ground environment and regional factors."

The hyper-connected era requires continuous connectivity without spatial constraints. The risk of accidents inevitably increases if autonomous vehicles cannot receive real-time road condition information. Communication satellites have become important. Satellite communication can substitute when ground networks face issues, including natural disasters. Satellite networks are necessary to maintain connectivity in maritime, aerial, and mountainous areas. Low Earth orbit satellites can provide internet to shadow areas. Additionally, there is great potential for use in precision observation and navigation fields. SpaceX aims to launch 42,000 satellites. It has already launched over 5,500 and secured more than 2 million subscribers.

Among domestic listed companies in the aerospace industry, Satrec Initiative, Contec, and Intellian Technologies are expected to be promising. Satrec Initiative, whose corporate value has rapidly increased this year, had a satellite system order backlog of 353.8 billion KRW as of the end of last year, up 38.3% from the previous year. Considering that the development period for the ultra-small cluster satellite project is until December 2027, orders are expected to continue. The largest shareholder of Satrec Initiative is Hanwha Aerospace, holding 33.6% of the shares.

Contec provides integrated satellite data solutions capable of satellite image reception, processing, and analysis through ground station system design and construction. Growth is expected in the ground station satellite image service (GSaaS) business sector. Doohyun Kim, a researcher at Hana Securities, explained, "Observation satellites need to capture as many images as possible," adding, "Since there is a limit to the data memory storage space within satellites, data must be transmitted to ground stations after capturing specific areas." He continued, "Contec built a private ground station in Jeju Island in 2019 and currently owns a total of 10 ground stations worldwide," adding, "They receive data from client satellites through their own ground stations and charge fees."

Intellian Technologies supplies user terminals and gateways to satellite communication companies. It announced that it signed an antenna supply contract worth 35.7 billion KRW the previous day. Jisoo Jung, a researcher at Meritz Securities, explained, "They signed a gateway antenna supply contract with a global company A," adding, "This is the second order following the initial contract worth 30.6 billion KRW with the same global company A in August last year."