Guotai Haitong has released a research report stating that during the "15th Five-Year Plan" period, the accelerated deployment of satellite internet constellations will drive continuous growth in demand for rocket engines.

High technical barriers in engines are pushing up the value of upstream materials and precision manufacturing segments. Given that whole-engine enterprises are not yet listed, investors are advised to pay attention to leading upstream companies with core technologies and mass-production delivery capabilities, according to Guotai Haitong.

The main views of Guotai Haitong Securities Co., Ltd. (601211) are as follows: The acceleration of satellite internet constellation deployment is unleashing demand, and the market space for rocket engines is expected to continue expanding.

Commercial aerospace is driving the space industry to transform from customized, small-batch, high-cost operations toward standardized, large-scale, low-cost models, with the industry rapidly moving toward large-scale application.

Low-orbit satellite frequency and orbit resources are scarce. Under the ITU's constellation deployment deadline requirements, rocket launch demand is urgent. In 2026, China's rocket recovery technology achieved important breakthroughs, but large-scale reuse still requires continuous verification, and the impact on new engine demand is expected to be limited in the short term.

Assuming at least 10 types of liquid rockets have satellite internet constellation launch capabilities, with annual launches per model of 5, 10, and 20 times in 2027-2029 respectively, and based on 10 engines per rocket at 5 million yuan each, the corresponding annual theoretical market space would be approximately 2.5 billion, 5 billion, and 10 billion yuan respectively.

Liquid oxygen-kerosene and liquid oxygen-methane technologies are developing in parallel, and the supply system is shifting from central state-owned enterprises to diversified development.

Liquid engines mainly consist of thrust chambers, turbopumps, gas generators/pre-combustion chambers, pipelines, and valves. They generate thrust by controlling the continuous and stable combustion of propellants, producing high-temperature and high-pressure gas that is accelerated and expelled through nozzles.

Liquid oxygen-kerosene technology is mature and has become the mainstream choice for most rockets, while liquid oxygen-methane has become an important development direction due to its reusability potential.

China's liquid engine supply system is transitioning from being dominated by central state-owned enterprises to joint development by multiple entities: the China Aerospace Science and Technology Corporation has deep technical expertise in liquid rocket engines; private enterprises such as LandSpace, Space Pioneer, Galactic Energy, CAS Space, iSpace, and Orienspace are continuously advancing independent research and development, building vertically integrated capabilities in engine development and full rocket integration; independent power suppliers such as JiuZhouYunJian are exploring specialized supporting models.

Extreme operating conditions and complex structures create high technical barriers, and advanced materials and high-end manufacturing segments carry high added value.

Liquid rocket engines must achieve high-temperature and high-pressure combustion and precise thermal management within limited space and weight constraints, with technical barriers mainly concentrated in materials and materials processing. On the materials side, high-performance copper alloys, superalloys, titanium alloys, and refractory metals form the core material system for engines; on the processing side, complex cooling channels and precision structures impose stringent requirements on forming processes and machining accuracy. Traditional manufacturing processes are technically mature with fully verified reliability, while metal additive manufacturing offers significant advantages in forming complex structures, reducing part counts, and shortening manufacturing cycles.

Risk warnings: Constellation deployment progress may fall short of expectations; engine R&D progress may fall short of expectations; launch cost reduction progress may fall short of expectations; industry competition may intensify; and performance realization may fall short of expectations.