China’s commercial space sector swung from a limit-up frenzy to a broad sell-off days after the Long March 10B completed its maiden flight and recovery milestone, highlighting a widening gap between industrial progress and secondary-market pricing.
On July 13, the sector surged and then reversed lower, with Dianke Lantian down more than 10% and Aerospace Power, Sunway Communication, and Tongyu Communication also falling. The Shenzhen Component Index and ChiNext Index both lost more than 2%, while previously hot AI names rebounded and capital rotated out of space-related stocks.
Only one weekend earlier, on July 10, news that the Long March 10B had made its first flight and delivered the world’s first net-based rocket recovery had sparked a rally across the board. More than 30 stocks hit their daily upper limit, and China Spacesat and China Satcom, both trillion-yuan-scale names as described in the source, were locked at limit-up.
A technical milestone that did not anchor the market
The source article says the Long March 10B launch was far from routine. At 12:15 pm on July 10, the 63-meter rocket, with liftoff thrust of 890 tons, lifted off from the Hainan commercial launch site. About six minutes after stage separation, the first stage returned vertically and was caught by the flexible barrier net of the recovery platform Navigator.
According to the article, that marked China’s first controlled recovery of a heavy-lift rocket first stage and the world’s first net-based recovery of its kind, making China the second country after the United States to master the technology.
The article points to market structure and quant activity
The piece argues that the sharp reversal was rooted less in headline flow than in the composition of capital behind the sector. Citing Securities Times, it says mutual funds and social security funds have long been underweight or absent in commercial space. Even among names that had risen more than 100%, such as Sirui New Materials and Information Development, no mutual funds had appeared among the top 10 tradable shareholders. Aerospace Power and Aerospace Development had institutional participation, but overall holdings remained limited.
Without a broad and systematic long-only base, the sector has little ballast. In that environment, the article says, quantitative strategies carry more influence. It cites data showing quant money accounts for 20% to 30% of A-share turnover, with the effect magnified in sectors where institutions have not built core positions.
The article characterizes this cycle of sharp decline, rapid rise, and pullback as a product of capital structure. It describes quant trading as centered on volatility arbitrage: buying aggressively into hot themes and then reversing once retail money follows.
As one example, it highlights Aerospace Development’s July 10 trading list. The top five buyers included Shenzhen-Hong Kong Stock Connect, institutions, and speculative trading desks, while one of the sellers was East Money’s Lhasa Tuanjie Road No. 1 branch. Institutional net buying on the limit-up day was 85.71 million yuan, while retail money from the Lhasa branch posted net selling of 18.06 million yuan, according to the article.
The same stock appeared on the notable-trading list eight times over the past six months, and its average decline over the following five trading days was 10.66%, the article says.
Primary capital keeps backing the sector
The source draws a sharp contrast with the primary market. Citing Taibo Think Tank, it says China’s commercial space industry logged 89 publicly disclosed financing events in the first half of 2026, totaling 15.13 billion yuan. Rocket launch companies accounted for 44% of the financing amount, the largest share among subsectors. National and local guidance funds were described as the main source of patient capital.
The article also uses SpaceX as a reference point, saying the company reached a $1.77 trillion market capitalization after listing this year despite a net loss of $4.94 billion in 2025. In that framing, primary-market capital is pricing long-term space economy potential, including a 2.83 trillion yuan market opportunity cited from CCID Think Tank, demand for tens of thousands of satellite launches over five years, and a first-come, first-served race for orbital resources.
Its conclusion is that private and institutional capital in the primary market is underwriting future launch capacity and orbital positioning, while the secondary market remains dominated by retail flows and quantitative signals.
Three waves over two years
The article breaks the past two years into three market phases.
- The first came in early 2025, when China submitted frequency and orbital resource applications for 203,000 satellites across 14 constellations to the International Telecommunication Union. The market responded with a “China’s SpaceX” trade. China Spacesat’s price-to-earnings ratio climbed to 2,400 times, and China Satcom warned in its own filing that a “passing the parcel effect” was obvious.
- The second came in late 2025, when the China National Space Administration set up a commercial space division and the STAR Market’s fifth listing standard was introduced, clearing a financing path for unprofitable rocket companies. Blue Arrow Aerospace pushed for an A-share listing, but failed recovery tests for Zhuque-3 and Long March 12A cooled the rally.
- The third arrived in spring 2026, when reusable rockets entered a dense testing window. Zhuque-3 Yao-2 completed a static fire test, Lijian-2 made a successful maiden launch, and the Long March 10B had originally been scheduled for its first flight in April. But Tianlong-3 suffered a flight anomaly after liftoff, and the April 3 explosion forced the market to turn cautious again.
Before the latest rebound, the commercial space sector had already fallen 8% over three trading days, with Shenjian Co. hitting limit-down and several stocks dropping more than 10%. The Long March 10B launch from Hainan on July 10, and its completion of a full “orbital launch plus controlled recovery” loop, reignited the theme.
Reusable rockets are becoming the valuation test
The source says the sector’s drivers have moved in a clear sequence: concept, then policy, then technical verification.
On cost structure, it notes that the first stage accounts for more than 70% of a rocket’s total cost. Recovering it changes the economics directly. SpaceX’s Falcon 9, through 34 reuses, has cut orbital delivery cost to 19,000 to 28,000 yuan per kilogram, while domestic launch quotes are currently 50,000 to 100,000 yuan per kilogram. Blue Arrow Aerospace’s target for Zhuque-3 is below 20,000 yuan per kilogram. If reusability fully matures, industry estimates cited in the article put the eventual cost below 1,000 yuan per kilogram.
Demand, meanwhile, remains large. The GW constellation is planned for 12,992 satellites, and the Qianfan constellation for 13,904 plus 1,296 more, bringing the combined plan to more than 50,000 satellites. Against that, China has only 18 commercial launch pads in operation and seven more under construction, with an average queue time of one month, according to the article.
Yuanhe Chenkun’s report on the low-orbit satellite internet industry ranked investment priority in this order: rocket prime contractors, then satellite operators, then complete satellites, then satellite components. The logic, as quoted in the article, is that whoever cracks recovery first and pushes down cost gains control over the constellation market’s main valve.
The second half will bring more tests
The article says the second half of the year will serve as a concentrated stress test for the industry thesis. Zhuque-3 Yao-2’s recovery attempt is the nearest exam. If it succeeds, it would become the first liquid-fueled rocket from a private company to achieve orbital-class recovery. Zhishenxing-1 is nearing maiden launch, while Tianlong-3 is scheduled to fly again in the second half after its April setback. The Long March 10B is also set to attempt its first reused flight before year-end, moving from “recoverable” to “reusable.”
Capital-market milestones are lining up too. The article says SpaceX’s $1.77 trillion post-listing valuation has set a benchmark for the global commercial space sector. Blue Arrow Aerospace has advanced to the inquiry stage for a STAR Market IPO, and Zhongke Aerospace is following behind. That means China’s rocket companies are approaching their first real public-market valuation test.
Interim earnings are part of that picture. China Spacesat disclosed on July 12 that first-half net profit is expected at 30.5 million yuan to 36.5 million yuan, returning to profit year on year. Upstream supplier Zhenlei Technology posted more than 400 million yuan in revenue in the first quarter with a 31% profit margin, while BLT reported 40.5% revenue growth and a doubling of net profit. Downstream player Piesat saw first-quarter revenue plunge 86% and has been placed under *ST status, according to the source.
Industrial progress and pricing still run on different clocks
The article closes with a simple point: the successful recovery of the Long March 10B is a historic step for China’s commercial space industry, and it opens a clearer path to lower launch costs. From an industrial standpoint, the signal is positive.
But that does not mean the market will recognize the shift at once. Volatility remains intense, quant-driven pricing has not stepped aside, and the split between profitable upstream suppliers and loss-making downstream companies is still in place.
For now, the source argues, the industry inflection point and the market’s pricing inflection point are not the same thing.