SpaceX has fallen for six consecutive trading days, and the commercial aerospace industry is facing a profitability test

In just over a month, SpaceX has gone through a dramatic shift from an "epic IPO" to trading below its offering price.

At 5:45 p.m. local time on July 16, SpaceX's 13th Starship test flight mission was forced to postpone after an automatic abort sequence was triggered by the failure of multiple engines to ignite. This marked the first Starship test flight since SpaceX's initial public offering, occurring at a time when its share price was under pressure and short-selling volumes reached a rarely seen high level in the market. SpaceX CEO Elon Musk posted on social media that the next test flight is expected to take place in a few days.

As of the market close on July 17, SpaceX's stock closed at $123.99 per share, corresponding to a market capitalization of $1.63 trillion. The stock has fallen for six consecutive trading sessions and dropped below its $135 offering price. Previously, SpaceX's share price once hit a peak of $225.64, with its total market value approaching $3 trillion at one point, placing it among the top five most valuable companies by market capitalization on the U.S. stock market. The current pullback from elevated levels is interpreted by the market as the combined result of a cooling AI narrative, valuation reevaluation, the approaching flood of share unlocks, and the unwinding of optimistic positions.

SpaceX has built a business landscape spanning three fronts: Space, Starlink, and AI. Starlink is its only profitable business segment. Although it generated $11.4 billion in revenue and $4.4 billion in operating profit in 2025, it still cannot offset the massive losses from the AI and space launch businesses. SpaceX posted a loss of approximately $4.9 billion last year, and there is still no clear timeline for when it will achieve overall profitability.

According to a report from The Wall Street Journal, of the $25 billion in bonds issued by SpaceX at the end of last month, $3.5 billion are due in 2056. However, since trading began, the price of this tranche of bonds has been falling steadily, with a current yield of 7.5%, reflecting market concerns about SpaceX's future profit model.

I. Initial Results in Cost Reduction via Rocket Recovery

The goal of all mainstream rocket recovery technology approaches is to turn the first-stage rocket body, which accounts for two-thirds of a rocket's total cost, from a one-time consumable into a reusable asset.

A report from the China Investment Industry Research Institute shows that based on public data, after Falcon 9 achieved first-stage rocket recovery and reuse, its launch cost dropped from approximately $50 million in the new, unused state to around $15 million in the reused state. The launch cost of a recovered and reused rocket is only 30% of that of a one-time launch. The launch cost for low-orbit missions has fallen to roughly $700-$2000 per kilogram, and the number of annual launches has increased from 7 in 2015 to 171 in 2025.

Currently, SpaceX's reuse technology has evolved from recovering the first stage of the Falcon rockets to full-stage reuse of the Starship. Cost calculation charts released by SpaceX in June this year show that the Falcon Heavy will further reduce launch costs to $1400 per kilogram, representing a 92% decrease; the fully reusable Starship targets a cost reduction of over 99%.

China's commercial space industry is now in a critical window period for catching up. According to estimates from Guohai Securities in April this year (calculated by amortizing development costs), the current unit launch cost of domestic one-time rockets is approximately 60,000 yuan per kilogram, which still lags far behind SpaceX's post-reuse cost level. However, 2026 is regarded as the inaugural year for breakthroughs in domestically produced recoverable rockets.

On July 10, the Long March 10B completed its maiden flight in Wenchang, Hainan, marking the world's first successful "controllable net-based recovery at sea" by a Chinese launch vehicle. Multiple brokerages predict that within the next 3-5 years, domestic launch costs are expected to drop to 20,000-30,000 yuan per kilogram, with room for further declines.

The "2026 Research Report on High-Quality Development Trends of China's Commercial Space Industry" from CCID Consulting also notes that rocket technology routes are becoming diversified, with more than 10 new rockets scheduled to make their maiden flights in 2026. Over 12 reusable rocket flight and recovery tests are planned for 2026. Most leading enterprises have already moved their first reusable rocket models into the ground testing phase, and 2026 is expected to be a pivotal year for China to achieve breakthroughs in orbit-class rocket recovery.

Once the cost reduction channel is fully opened, it will fundamentally transform the entire industry's business model. Space industry expert Pang Zhihao once stated that mastering rocket recovery and reuse technology can reduce launch costs by about 80%. A significant drop in launch costs will bring about a qualitative change in the economic feasibility of low-orbit constellation deployment. Analyses from China International Capital Corporation show that launch costs account for 30% to 40% of the total cost of constellation construction, so cost reduction at the launch end can directly dilute the overall construction cost of the constellation. At that point, constellation deployment will shift from a "national mission that disregards costs" to a "commercially viable activity with clear returns", and market mechanisms will play a more lasting and efficient role than policy-driven efforts.

The China Investment Industry Research Institute emphasized in its report that within the commercial space value chain, launch services and constellation construction represent the "first half" of the journey, while services such as satellite communications, navigation, and remote sensing form the second half. Only when the roads are well paved in the first half can vehicles run smoothly in the second half.

Rockets send satellites into orbit, where satellites collect data and transmit signals. These signals and data ultimately serve real-world ground demands—from internet access in remote areas to autonomous driving navigation in uninhabited zones, from agricultural soil moisture monitoring to urban emergency communications. The broader the application scenarios expand, the more rigid the demand for satellite networks becomes, and the higher the requirements for launch capacity and cost reduction, thus forming a positive feedback loop of "cost reduction — constellation deployment — scenario expansion — demand growth — further cost reduction".

Current industry competition is concentrated in three major fields: rocket launch, satellite manufacturing, and satellite applications. A research report from Soochow Securities analyzes that recoverable rockets are the key to cost reduction, and relevant domestic technologies are still in the verification stage; satellite manufacturing is transitioning to industrialized mass production, and the domestic satellite industry is growing rapidly, while competition for low-orbit frequency and orbit resources has become white-hot; downstream communications, remote sensing, and navigation are the core applications that realize industrial value, and satellite internet opens up vast incremental market space.

The China Electronics Information Industry Development Institute predicts that in 2026, downstream sectors in China including satellite communication operations, remote sensing operations, navigation and location-based services will contribute approximately 450 billion yuan in market increments, accounting for about 70% of the total commercial space market increment. This structure indicates that the value realization of the commercial space industry is shifting from "building rockets and satellites" to "utilizing rockets and satellites".

II. Some Enterprises Are Expected to Achieve Profitability in 2029

While technological breakthroughs are being made, both Landspace and CAS Space have updated their IPO prospectuses for the Sci-Tech Innovation Board, and Tianbing Technology's valuation has exceeded 30 billion yuan. According to incomplete statistics, nearly 15 domestic commercial space companies are intensively advancing toward IPO listings.

The formation of this capital race is now sufficiently clear. In the first echelon, Landspace and CAS Space have entered the "inquired" stage, and Micro-Nano Star has been "accepted", making them the batch closest to listing. In the second echelon, Tianbing Technology, Galactic Energy, and i-Space have entered the IPO counseling period, and all of them have secured large-scale financing of billions of yuan in previous rounds.

In addition, two special cases are worth noting. Kuaizhou Rocket is undergoing in-depth mixed-ownership reform that involves divesting its central SOE qualification and being controlled by local state-owned capital, which has forced its IPO timeline to be delayed. Meanwhile, Guoxing Aerospace has chosen a differentiated path to list on the Hong Kong Stock Exchange, having submitted its prospectus for the third time, focusing on the space computing concept and striving to become the "first space AI stock".

It is worth mentioning that the use of raised funds is highly unified, with core capital mainly directed toward recovery technology verification and production capacity expansion.

For example, Landspace plans to raise 7.5 billion yuan for reusable rocket production capacity improvement projects and reusable rocket technology upgrading projects. CAS Space intends to raise 4.18 billion yuan, of which 52.21% will be invested in the R&D of large reusable launch vehicles, about 20% in the R&D of reusable vehicles and spacecraft, and 8% in the construction of the reusable liquid engine industrial base. Micro-Nano Star, which aims to become the "first private commercial satellite stock", plans to raise 5 billion yuan to target the mass production of satellites.

The urgency stems from two aspects: first, the constellation deployment tasks of tens of thousands of satellites, such as the GW constellation and Qianfan constellation, are forcing rocket enterprises to reduce the cost of a single launch from 80-120 million yuan to the 50 million yuan level; satellite enterprises need to rely on mass production lines to shorten the manufacturing cycle. Second, VC (venture capital) funds that entered these projects in the early stage have reached their exit periods, and IPO is almost the only viable exit path. An investment banker close to the Galactic Energy project once stated bluntly that the primary market can no longer absorb the scale of these companies, and they must move to the secondary market.

Policymakers are also racing against time: at the end of 2025, the fifth set of standards of the Sci-Tech Innovation Board opened a green light for the commercial space industry, but industry insiders generally judge that after leading players are established and the industry landscape reshuffles between 2027 and 2028, listing thresholds will inevitably tighten, making 2026 the IPO window period for the commercial space sector.

However, the commercialization reality remains severe. From 2023 to 2025, Landspace's operating revenue was 3.9521 million yuan, 4.2783 million yuan, and 52.0963 million yuan respectively; its net profit attributable to shareholders was -1.188 billion yuan, -876 million yuan, and -1.711 billion yuan, with a cumulative loss of over 3.7 billion yuan over three years. From 2023 to 2025, CAS Space's operating revenue was 77.72 million yuan, 244 million yuan, and 277 million yuan respectively, with a cumulative loss of nearly 2.5 billion yuan over three years.

Among satellite companies, Micro-Nano Star has recorded a cumulative loss of nearly 1.1 billion yuan over the past three years, with revenue from its top five customers accounting for 79.75%, 74.95%, and 92.33% of total revenue respectively. Guoxing Aerospace's cumulative net loss over the past three years exceeded 570 million yuan, with revenue from its top five customers accounting for 56.1%, 77.5%, and 78.0% respectively.

2029 has become the expected potential profitability node for both CAS Space and Landspace.

In its prospectus, CAS Space mentions that based on factors such as industrial policies, market space, product R&D, and production, under optimistic and neutral assumptions, the company's management expects the company to achieve profitability in 2029; under conservative assumptions, profitability is expected in 2030. The aforementioned forecast is a preliminary estimate made based on factors including the future commercial space market size, domestic large-scale satellite internet constellation deployment plans, remote sensing and navigation satellite launch demands, as well as the company's product launch plans and operational plans, and does not constitute the company's profit forecast or performance commitment.

Landspace expects to achieve consolidated financial statement profitability as early as 2029, with the core support coming from the normalized and reusable commercial operation of the "Zhuque-3" launch vehicle based on launch frequency, revenue per launch, orbital success rate, and first-stage reuse. However, the company also warns that it is still in the early stage of commercialization and has not yet formed a commercial closed loop of "recovery — reuse — reflight". Unit costs and supply chain efficiency cannot yet achieve economies of scale dilution, there is a gap with leading enterprises such as SpaceX, and sustained profitability and operational stability still need to be verified.

It is reported that SpaceX's first quarterly financial report is expected to be released in the first week of August, when the first phase of its IPO lock-up period will expire. B. Riley Wealth Chief Market Strategist Art Hogan stated: "Everyone is talking about where this company could be in 2030, rather than its realistic performance in the next 12 months. This is an investment focused on the more distant future, but you still have to look four years ahead."

In comparison, SpaceX is using the cash flow from Starlink to offset losses from its other businesses, but domestic commercial space enterprises generally lack such a profit pillar. While rocket recovery technology is still being refined through repeated testing, the downstream application market for satellite internet is far from mature, and when prospectuses still need to rely on optimistic assumptions of "2029 profitability" to support valuations, the pricing logic of the secondary market will face continuous scrutiny. The long-term development of the commercial space industry ultimately needs to return to verifiable financial returns.

This article is from "Caijing New Media", written by Liu Fen, edited by Jiang Shizhou, and published with authorization from 36Kr.