The rocket crashes, but the stock price soars.

The rocket failed to land stably on the ground once again.

At the end of 2025, two highly anticipated new rockets in China - Zhuque-3 and Long March 12A - successively accomplished their primary mission of sending their payloads into orbit. However, they also successively experienced the regret of failed booster stage recovery in full view of the public.

According to the traditional scenario, this should be the moment when the capital market sounds the alarm and investors flee one after another.

However, the reality staged a puzzling "reverse" market trend. The aerospace sector, especially the commercial space concept stocks, soared collectively in the following weeks. Some stocks even doubled their share prices within just a few trading days.

Has the market gone into an irrational frenzy?

I think on the contrary, this is a highly rational revaluation of value carried out under new rules and clear expectations.

When Uncertainty Becomes the Most Certain Thing

It is the nature of capital to dislike uncertainty.

But in the context of China's commercial space industry, a new type of certainty is being established - that is, the "certainty of engineering iteration."

In the past, space exploration was a great cause that avoided talking about failures.

Each launch carried extremely high national honor and financial costs. Failure meant immeasurable losses and a long investigation period. This extreme pursuit of "zero errors" undoubtedly built reliability, but it also invisibly increased the cost of trial and error and slowed down the pace of technological iteration.

The introduction of commercial space, especially the in - depth participation of private capital, has completely changed this set of rules of the game.

It introduced a "rapid trial - and - error" culture originating from Silicon Valley and verified by Tesla and SpaceX. That is, to use affordable capital to buy valuable failure data, so as to accelerate the path to final success.

SpaceX's Falcon 9 rocket experienced many shocking explosions and crashes before its first successful soft landing.

These "failed" images and data were transmitted globally via the Internet, completing a national education that lasted for many years about "how difficult it is to develop a reusable rocket."

The market thus learned a key perception. For reusable rockets, the first or even the first few recovery failures are the "default settings" and "required courses" in the R & D process.

Success, on the contrary, is a small - probability surprise.

Therefore, when Zhuque-3 and Long March 12A failed to achieve recovery, the Chinese capital market did not see a black - swan - like accident, but a predictable phased result in line with international mature R & D rules.

The pricing logic of the market has thus undergone a fundamental reversal.

It no longer prices the variable question of "whether it can succeed," but starts to price the clearly - path process of "how to move from failure to success." A failure with detailed data and a transparent process may be far more valuable than a success with vague reasons.

Why? Because it clearly tells engineers where the problem lies, which link needs to be strengthened, and what the optimization direction of the next iteration is. The market funds are exactly paying a premium for this system ability of "rapidly locating and fixing problems." The market is investing in a visible upgrade ladder paved with failures.

Orders Must Come

If we no longer get entangled in the success or failure of the whole rocket's recovery and instead focus on the thousands of components that make up a rocket, a more magnificent picture will unfold before our eyes.

This is the change of the "decoupling" of the industrial chain value.

Take Shenjian Co., Ltd., whose share price soared wildly, as an example. Its core business is high - end composite materials and other products.

It is not directly responsible for the rocket's recovery control algorithm or landing leg design. However, whether it is a successfully recovered rocket or a crashed one, as long as it is launched, it will inevitably consume the materials it produces.

This is the core of the problem.

When reusable rockets enter the high - frequency test - flight stage, what is first driven is not the economic benefits of recovery, but the "extreme stress test" and "continuous consumption demand" for the entire aerospace industry supply chain.

Each launch, regardless of whether the first stage can be recovered, requires new or tested engines, a large number of advanced composite materials, precision valves, special sensors, and high - performance electronic components.

The R & D of reusable technology means that these components need to verify their reliability under more severe cyclic use conditions. The test intensity and iteration speed far exceed those of the traditional "single - use" rocket era.

For supply - chain enterprises, a continuous and high - frequency launch plan jointly promoted by multiple commercial rocket companies (including the commercial projects of the "national team") means unprecedentedly clear order visibility. What the market is hyping is this upstream high - end manufacturing system that is about to be "fed full" and pushed into the fast - track of technological upgrading.

The more crucial logic lies in the risk hedging brought by the "dual - track verification."

The almost simultaneous verification of similar technologies by Long March 12A (carrying the technological heritage of the national team) and Zhuque-3 (representing the innovation speed of the private sector) is a landmark event in China's space history. For supply - chain enterprises, this is no less than an "insurance for the technological path."

Two entities with different technological routes and management models are pursuing similar goals (vertical recovery) at the same time and using similar domestic components.

This greatly proves the necessity and reliability of these core components.

Regardless of whether the "national team" plan or the private company's plan finally wins, supply - chain enterprises have firmly taken their seats at the table and become indispensable "arms dealers."

Their value has been "decoupled" from the success or failure of a single rocket recovery and is instead closely linked to the upgrading intensity of the entire Chinese aerospace industry.

How Does the IPO Expectation Ignite the Sector's Market?

However, there is also an important reason.

We know that the explosive growth of any industry cannot be separated from a clear exit mechanism and the expectation of wealth effect. The "Guidelines" issued by the Shanghai Stock Exchange at the end of 2025 are exactly the institutional spark that ignited this capital feast.

This document laid out a clear and wise path for commercial rocket companies to list on the Science and Technology Innovation Board.

The most core wisdom of it is that it sets the listing threshold as "the first successful orbit insertion of the payload launched by a medium - to - large - sized reusable launch vehicle," rather than "successful recovery."

The regulatory authorities' move shows respect for the objective laws of aerospace engineering.

The state recognizes that "successful orbit insertion" is a key milestone in the technical feasibility of commercial rockets and encourages the capital market to use funds to support enterprises to overcome the last and most challenging engineering - ability - testing hurdle from "orbit insertion" to "recovery."

This means that even if a rocket company has not yet achieved recovery, as long as it proves its strong carrying capacity and system reliability, it can obtain the "ticket" to the public capital market.

Landspace completed its IPO counseling quickly after the policy was issued, which is an interpretation of this logic.

The listing path for commercial space enterprises is now open, and a new capital market sector with extremely high technological content and imagination space is about to be born.

So, the funds in the secondary market took action upon hearing the news and started a lively "position - taking game." They frantically searched for and hyped the "shadow stocks" that have supply - chain relationships, technological cooperation, or simply business associations with leading enterprises such as Landspace, iSpace, and CAS Space.

In essence, this is a bet on the rise of the entire commercial space ecosystem. It is a self - made "investment portfolio" before the official establishment of the index fund for this new sector.

The liquidity of the entire sector was instantly activated, and the valuation logic quickly switched from the traditional price - to - earnings ratio and price - to - book ratio to the longing for future market space, technological barriers, and industrial - chain positioning.

The Data Dividend of Failure

Under the extremely high confidentiality requirements and the quality culture of being foolproof, the failure lessons in the traditional aerospace field are often highly closed. The costs are borne by the national - level finance, and the experience is mainly circulated within the system to a limited extent. While commercial space, especially private space, has creatively marketized and made "failures" transparent.

Every public launch and recovery attempt like that of Zhuque-3, regardless of success or failure, generates a large amount of telemetry data, high - speed images, and structural stress change information, which are a precious "engineering gold mine." These data not only belong to the R & D company itself but also, through media reports, industry exchanges, and supply - chain feedback, more or less nourish the "public knowledge pool" of the entire Chinese aerospace industry. Private capital uses its own money to bear the high - risk trial and error, and the experience and lessons produced objectively reduce the cost and risk of subsequent attempts in the entire industry.

This makes every public and analyzable failure a scarce resource that accelerates the overall progress of the industry.

The capital market obviously sees this. The enterprises they invest in are not only buying rockets and launch services but also buying the ticket to enter this expanding "China Aerospace Failure Database" and gain the priority to learn and evolve from it.

This ability to quickly accumulate engineering experience through the market mechanism is becoming a unique and efficient late - comer advantage for China's commercial space industry to catch up with the world's leading level.

At the forefront, the state, through major projects, basic research investment, and policies like the "Action Plan," bears the responsibility of direction guidance and the early - stage risks of the most basic technologies.

In the middle stage, venture capital (VC/PE) and private equity pour in under the encouragement of policies and bear the high - risk, high - return stage of supporting enterprises from the verification of technical principles to the first successful orbit insertion of products.

Now, with the clarification of the fifth set of listing standards on the Science and Technology Innovation Board, the baton is being passed to the public capital market. A large number of investors in the secondary market are invited to jointly bear and digest the risks between "technical feasibility" and "commercial success" - that is, to achieve stable recovery, reduce costs, obtain orders, and achieve profitability - which is a challenging but promising stage.

The current fanaticism of concept stocks can be regarded as the secondary - market funds actively intervening in and sharing the most dramatic engineering - risk stage from "failure to success" in advance.

This is not blind speculation but a bet on a risk level that one is willing and able to bear in a risk spectrum clearly planned by the system.

This is a grand experiment designed by the state and participated in by the market to jointly compress the time of technological iteration.

Conclusion

Ultimately, stripping away all the technological glory and capital hype, the ultimate goal of all attempts in China's commercial space industry is only one, that is, to reduce the cost of accessing space by an order of magnitude.

Reusable rockets are not the goal but the means.

Its entire significance lies in that by reusing the most expensive part (the first stage of the rocket), it can greatly reduce the marginal cost of each launch. Only when the launch cost is reduced to a low enough level can the space economy truly move from expensive national - level scientific research and special communications to large - scale constellation deployment, space tourism, in - orbit manufacturing, and even deep - space mining and other broad commercial blue oceans.

The current "soaring" of the capital market is essentially a collective bet on whether "Made in China" can replicate its cost - control miracle in the aerospace field.

Investors are betting that with China's complete industrial system, strong engineering ability, efficient organizational model, and abundant capital supply at present, China's commercial space industry can achieve a steeper "cost - reduction curve" than SpaceX did back then. Every specific failure, as long as it brings effective data, promotes technological improvement, and trains the team, is regarded as another precise removal of an obstacle on this cost curve.

The temporary fall of the rocket has not dampened hope. Instead, it makes capital more convinced that the path is correct, the method is effective, the iteration is fast, and the goal is within reach.

Then, when the rocket can finally return to the ground stably, frequently, and economically, today's seemingly fanatical capital may be proven to be the most far - sighted investment.

This article is from the WeChat official account "Dongzhen Business Strategy." Author: QIQI LOVES BOASTING. Republished by 36Kr with permission.