Rocket breakthrough, stock slump
China’s commercial space stocks swung from a limit-up frenzy to a broad selloff after the successful first flight of the Changzheng-10B rocket failed to sustain market momentum.
On July 13, the sector opened strong and then fell back sharply. Dianke Lantian dropped more than 10%, while Aerospace Power, Sunway Communication and Tongyu Communication also declined. The Shenzhen Component Index and ChiNext Index each fell more than 2%. At the same time, money rotated back into AI names that had been popular earlier, and the article said space-related stocks were effectively drained of funds.
That came only days after July 10, when the first flight of Changzheng-10B and the world’s first net-based rocket recovery lit up the whole sector. More than 30 stocks hit their daily upper limit, and China Satellite and China Satcom, both trillion-yuan-scale names by market value in the article’s wording, were pinned at limit-up.
The source article, written by Gelonghui and published by TechFlowPost, described Changzheng-10B as far more than a routine launch. At 12:15 p.m. on July 10, the 63-meter rocket, with liftoff thrust of 890 tons, launched from the Hainan commercial launch site. Roughly six minutes after first- and second-stage separation, the first stage returned vertically and was caught by a flexible blocking net on the “Navigator” recovery platform. The article called it China’s first controlled recovery of a heavy-lift rocket first stage and the world’s first net-system recovery, making China the second country after the United States to master the technology.
The pricing question
The article argues that the sharp “drop-rally-pullback” sequence was less about news flow than about market structure.
Citing Securities Times, it said mutual funds and social security funds have long maintained low exposure or no exposure at all to commercial space. Stocks such as Sirui New Materials and Information Development, both up more than 100%, still had no public funds among their top 10 tradable shareholders. Aerospace Power and Aerospace Development had some institutional participation, but holdings remained limited overall.
That left the sector without a broad, systematic long-term institutional base. In the article’s framing, when prices rise, investors pile in together; when prices fall, few step up to catch the selling.
The piece also said quant capital accounts for 20% to 30% of A-share turnover. In sectors without stable institutional inventory, that influence becomes much larger. It described the core logic of quant trading here as volatility arbitrage: the same strategy can drive both limit-up days and hard selloffs. Algorithms move ahead of retail traders when a theme turns hot, then reverse once retail money follows.
The article used Aerospace Development as one example. On July 10, the stock’s dragon-and-tiger list showed Shenzhen-Hong Kong Stock Connect, institutions and speculative trading desks among the top buyers, while Eastmoney’s Lhasa Tuanjie Road No. 1 branch appeared among sellers. Institutional net buying reached 85.71 million yuan that day, while so-called Lhasa retail money posted net selling of 18.06 million yuan.
It added that the company had appeared on the list eight times in the past six months, and the average decline over the following five trading days was 10.66%. In other words, funds entering on limit-up day had, on average, lost more than 10% five days later.
Primary market conviction, secondary market noise
The article draws a sharp contrast between secondary-market turbulence and continued primary-market backing.
According to Tabor Think Tank, China’s commercial space industry disclosed 89 financing events in the first half of 2026, raising 15.13 billion yuan. Rocket launch companies accounted for 44% of that total, the largest share among sub-sectors. The article said national and local guidance funds have become the main source of patient capital, and the industry is moving from spontaneous exploration toward a system led by state guidance.
It then cited SpaceX as a valuation reference point. The article said SpaceX reached a market value of $1.77 trillion after going public this year, despite a net loss of $4.94 billion in 2025. Its point was simple: primary-market money prices the long arc of the space economy, including the 2.83 trillion yuan market size estimated by CCID Think Tank, the certainty of launching tens of thousands of satellites within five years, and the first-come, first-served logic of orbital resources.
Public-market pricing, the article said, is still operating on a different time frame. In that structure, where retail traders and quant models dominate, real industrial progress can be drowned out by short-term trading.
Three waves in two years
The source article reviewed three major trading waves in China’s commercial space sector over roughly the past two years.
First wave: concept trading in early 2025
China filed frequency and orbital resource applications with the International Telecommunication Union for 203,000 satellites across 14 constellations in early 2025. The market quickly embraced a “China’s SpaceX” narrative. China Satellite’s price-to-earnings ratio rose to 2,400 times, and China Satcom issued an announcement warning that a pass-the-parcel effect had become very obvious. In the article’s view, the key shift was not the rally itself, but the fact that the market began to treat space as a scarce resource.
Second wave: policy-driven trade in late 2025
By late 2025, the National Space Administration had set up a commercial space division, described as the first national-level dedicated regulator for the field. The fifth listing standard for the STAR Market also gave loss-making rocket companies a clearer financing channel, and LandSpace moved to pursue the title of the first A-share listed commercial space company. Still, recovery tests for Zhuque-3 and Changzheng-12A failed, and momentum faded because the technology had not yet been validated.
Third wave: technical verification in spring 2026
In spring 2026, reusable rockets entered a dense testing window. Zhuque-3 Yao-2 completed static fire testing, Lijian-2 made its maiden flight, and Changzheng-10B had originally been scheduled for a first flight in April. First-quarter earnings also exposed a stark profit split along the supply chain, with upstream companies doing well and downstream names posting heavy losses.
Then Tianlong-3 suffered a failed first flight, and the April 3 explosion cooled market sentiment again. The mood did not turn until Changzheng-10B completed what the article called the first full closed loop of “orbital launch plus controlled recovery” on July 10.
The article stops short of saying a new cycle has definitely started. What it does say is that the drivers of each wave have clearly upgraded in sequence: concept, then policy, then technical proof.
Valuation tests ahead
The article argues that the disconnect between industrial progress and market pricing will eventually face a reality check, especially around reusable launch economics.
It said the first stage accounts for more than 70% of rocket cost. Recovering that stage can therefore save most manufacturing cost. SpaceX’s Falcon 9, through 34 reuses, has reduced cost to orbit to 19,000 to 28,000 yuan per kilogram, according to the article. Domestic launch quotes are now around 50,000 to 100,000 yuan per kilogram. LandSpace’s target for Zhuque-3 is below 20,000 yuan per kilogram, and some industry estimates in the article suggest mature reusability could eventually push the figure below 1,000 yuan per kilogram.
The article also highlighted a supply-demand mismatch. The GW constellation is planned for 12,992 satellites. The Qianfan constellation is planned for 13,904 plus 1,296 more. Total planning exceeds 50,000 satellites. Against that, China has only 18 commercial launch pads in operation, with another seven under construction, and average waiting time is about one month. In that setup, launch capacity itself becomes a strategic resource.
Quoting Yuanhe Chenkun’s report on the low-orbit satellite internet industry, the article ranked investment priorities as complete rockets first, then satellite operators, then complete satellites, then satellite components. Its logic was that whoever first cracks recovery and drives costs down will control the main valve of the constellation market. The article added that China’s private rocket track may ultimately have room for only two or three leaders.
What the second half could bring
The second half of the year, the article said, will bring a concentrated stress test for that industrial logic.
Zhuque-3 Yao-2’s recovery test is one of the nearest milestones. If successful, it would become the first liquid rocket from a private company to achieve orbital-class recovery. Zhishenxing-1 is nearing its maiden launch. Tianlong-3, after its failed attempt in April, is also due to fly again in the second half.
Changzheng-10B is set to attempt its first reuse flight before year-end. The article noted that moving from “can recover” to “can reuse repeatedly” is no easier than the first breakthrough itself.
Capital markets are moving in parallel. SpaceX’s post-listing valuation of $1.77 trillion has already set a reference line for the global commercial space sector, the article said. LandSpace’s STAR Market IPO has moved into the inquiry stage, and CAS Space is following. That means the valuation framework for Chinese rocket companies approaching public markets will soon be tested in full view.
The interim reporting season is also close. China Satellite disclosed on July 12 that first-half net profit is expected at 30.5 million yuan to 36.5 million yuan, reversing a year-on-year loss. The article points out that this is only a little over 30 million yuan in half-year profit for a satellite manufacturing leader valued at roughly one trillion yuan.
The split within the supply chain is already visible in earnings. Zhenlai Technology posted more than 400 million yuan in revenue in the first quarter with a 31% profit margin. BLT reported 40.5% revenue growth in the first quarter and a doubling of net profit. At the downstream end, Piesat saw first-quarter revenue plunge 86% and has already been marked *ST.
Industry turning point, pricing turning point
The article ends with a distinction: a rocket launch and a capital inflow do not run on the same countdown.
It describes the Changzheng-10B recovery as a historic breakthrough for China’s commercial space industry. Reusability has crossed its most important threshold, and the route toward lower costs is now clearer. Yet the market may not recognize that immediately. Volatility remains extreme, and the gap between an industrial turning point and a pricing turning point may still be considerable.