IPO Review | ADA Space Passes HKEX Hearing: Can AI Smart-Computing Satellites Underpin a New Paradigm for Commercial Space?

Title context: IPO Review | ADA Space Passes HKEX Hearing: Can AI Smart-Computing Satellites Underpin a New Paradigm for Commercial Space? Text: As SpaceX's Starlink satellites spread across the sky like a galaxy, and as low-orbit communication constellations become a strategic battleground that countries race to stake out, China's commercial space industry is embracing unprecedented historical opportunities. With the further implementation of satellite internet's new infrastructure attributes, the industrialization of satellite manufacturing and applications has accelerated markedly. Against this backdrop, Chengdu Guoxing Aerospace Technology Co., Ltd. (hereinafter referred to as "ADA Space") passed the Hong Kong Stock Exchange listing hearing on October 29, with GUOTAI JUNAN I as the sole sponsor. As a commercial space enterprise with satellite development and space-based solutions as its core businesses, why has ADA Space been able to win HKEX recognition at this moment? What are the technical barriers and growth logic behind it? Industry Transformation Spawns New Opportunities, Commercial Space Enters the Fast Lane The China Spacesat industry is undergoing a profound transformation from "state-team dominance" to "commercial operation." According to Frost & Sullivan data, the market size of the China Spacesat manufacturing industry continues to expand, with the compound annual growth rate from 2025 to 2030 maintaining a high growth trajectory. Behind this growth is the dual drive from policy and technology. At the policy level, the state has explicitly incorporated satellite internet into the new infrastructure category and introduced a series of industrial policies supporting commercial Addsino Co.,Ltd., clearing institutional obstacles for private enterprises to participate in satellite R&D, launch, and operations. At the technology level, breakthroughs in reusable rocket technology have significantly reduced launch costs, while the maturation of satellite miniaturization and batch manufacturing technologies has moved the deployment of thousand-satellite constellations from concept to reality. Notably, the technical barriers of the satellite industry are being redefined by AI technology. Traditional satellites primarily function for remote sensing observation, while the new generation of AI satellites possesses onboard data processing and real-time decision-making capabilities, enabling a full-chain closed loop of "collection-processing-application." This shift in technological paradigm not only enhances the timeliness and practical value of satellite data but also spawns entirely new application scenarios such as space computing power and spatial intelligence, opening up room for business model upgrades from "selling satellites" to "selling services" for commercial space. It is precisely in this wave of industry transformation that ADA Space, leveraging its first-mover advantage in the AI satellite field, has gradually established a differentiated competitive position. The company launched China's first AI application satellite in December 2018, developed and launched China's first AI large-model smart-computing satellite in September 2024, and on May 14, 2025, successfully launched an AI smart-computing constellation composed of 12 AI smart-computing satellites. It is understood that this is the world's first space smart-computing constellation consisting of 12 satellites deployed in a single orbital plane, with total onboard computing power reaching 5 POPS. On October 14, 2026, the company launched a second constellation composed of 8 AI smart-computing satellites. To date, the company has independently developed 6 AI payloads, 4 AI application satellites, and 26 AI smart-computing satellites, and has completed 15 space missions through launches arranged by itself or in coordination with partners, involving the successful launch of 35 satellites and 6 payloads. By cumulative number of successful AI satellite launches, the company ranks first among domestic private commercial space enterprises. Satellite + AI Builds Core Competitiveness The commercial implication of this technology roadmap is that traditional remote sensing satellites mainly transmit raw data back to the ground for processing, consuming large bandwidth and involving long response chains; AI application satellites move part of the data analysis and decision-making capabilities onboard, filtering out cloud cover, invalid imagery, and redundant data to improve downlink data quality; AI smart-computing satellites further turn satellites into in-orbit computing nodes, serving not only themselves but also providing AI computing power services to other spacecraft and ground applications. ADA Space's AI payloads have iterated to the seventh generation, with the latest generation's computing power no less than 10 POPS, and are planned to be installed on satellites to be launched in 2026. The company has also disclosed the "Star Computing Plan," with a long-term goal of building a dynamically maintained space-based computing network supported by the spectrum and orbital resources of 2,800 AI smart-computing satellites, and plans to launch the first 100 satellites under this plan by 2028. Supporting this plan is the company's early accumulation of spectrum and orbital resources. From 2018 to 2025, the company successively obtained ITU approval for 3,157 satellites, of which 2,800 are used to support the Star Computing Plan, with 2,800 obtained in 2024 alone. Spectrum and orbital resources follow the "first come, first served" international coordination mechanism, which constitutes one of the barriers most difficult for commercial space enterprises to replicate. Meanwhile, the company has established development facilities including the Chengdu AIT Center, Jiaxing Testing Base, Chengdu Chongzhou Additive Manufacturing Base, and Taizhou Center. The Shenzhen Center has obtained a construction land planning permit and begun construction. The Chongzhou Additive Manufacturing Base has a designed annual capacity of approximately 200 sets of satellite structural components, with a capacity utilization rate of approximately 95% in the first half of 2026, which the company describes as the largest super-meter-class satellite additive manufacturing base in China. These facilities, combined with standardized satellite platforms, enable the company's satellite design cycle of approximately three weeks and development cycle of approximately four months, providing an engineering foundation for batch delivery. In terms of business structure, ADA Space operates two business lines: satellites and related services, and space-based solutions. The former covers payloads, platforms, and complete satellite R&D, assembly integration and testing, launch coordination with third-party launch service providers, in-orbit delivery, and TT&C services; the latter, centered on its proprietary "Lingjing Engine," transforms satellite remote sensing data into customized solutions for spatial intelligence and computing power services, digital cities, urban governance, cultural tourism, and gaming scenarios. The company's business model covers the full chain of "building satellitesmanaging satellitesusing satellites," which is rare among domestic private commercial space enterprises. Customers mainly include technology companies, government agencies, research institutions, communication service providers, and universities. In 2023, 2024, 2025, and the first half of 2026, revenue from the company's top five customers accounted for 56.1%, 77.5%, 78.0%, and 91.1%, respectively, indicating high customer concentration, which is related to the project-based, long-cycle, high-value procurement characteristics of the satellite industry. Commercialization Progress Behind Financial Performance From a financial performance perspective, ADA Space demonstrates a clear growth trajectory. From 2023 to 2025, the company's revenue was RMB507.5 million, RMB553.5 million, and RMB702.7 million, respectively, achieving consecutive year-on-year growth. However, in the first half of 2026, revenue declined 6.3% year-on-year to RMB226.1 million. The company explained that this was mainly due to satellite launch and delivery plans being scheduled for the fourth quarter of 2026 and a decrease in space-based solutions revenue, partially offset by growth in satellite and related services revenue. Fluctuations in profitability merit closer examination. During the reporting period, the company's gross margins were 14.0%, 38.0%, 20.4%, and 39.3%, respectively. The company explained that the decline in gross margin in 2025 was related to low pricing for a pilot project involving the first AI smart-computing satellite using a flat-panel configuration, which was of a technical validation nature; the improvement in gross margin in the first half of 2026 was attributable to higher average selling prices driven by improved satellite performance, as well as lower material procurement prices resulting from bulk purchasing and industry maturation. It is worth noting that although the company recorded a net loss of RMB139.3 million in 2023, with losses widening in subsequent years, this was mainly due to strategic investment in the future. R&D expenses increased from RMB53.48 million in 2023 to RMB151.7 million in 2025, and were RMB108.6 million in the first half of 2026, with the proportion of revenue rising from 10.5% in 2023 to 48.0% in the first half of 2026. This high-intensity R&D investment is a necessary cost of maintaining technological leadership. Notably, excluding the impact of non-cash items such as share-based payments, the company's adjusted net loss actually showed a narrowing trend, indicating that its core business's cash-generating capability is gradually emerging. Looking ahead, ADA Space's valuation logic is not built on current profitability but on the proposition of "whether AI smart-computing satellites can move from technical validation to large-scale commercial delivery." The company plans to use the proceeds from this offering to build the Shenzhen Center, enhance R&D capabilities, make selective strategic investments and acquisitions, repay bank borrowings, and for working capital, with the Shenzhen Center planned to commence operations in 2028, focusing on enhancing satellite design, R&D, and testing capabilities. At the business level, the company plans to develop 16 satellites in the remainder of 2026, 36 and 60 satellites in 2027 and 2028, respectively, with the first batch of 100 AI satellites estimated at an average selling price of approximately RMB30.4 million each; it will also continue to advance cooperation with enterprises such as Tencent Cloud and SenseTime to explore integrated space-ground computing infrastructure, satellite AI model deployment, and in-orbit validation of onboard large models. If these orders are delivered and accepted as planned, the company's revenue structure will further tilt toward AI smart-computing satellites, and gross margin and operating leverage are expected to continue improving; however, if launch schedules, regulatory approvals, or customer acceptance are delayed, quarterly fluctuations in revenue recognition will remain significant, as exemplified by the slight year-on-year decline in revenue in the first half of 2026. Overall, ADA Space's passing of the HKEX hearing marks the transition of China's private commercial space industry from "telling technology stories" to "financial accountability." The company possesses scarce spectrum and orbital resources, complete satellite development and delivery capabilities, an AI smart-computing satellite product line that has already generated commercial revenue, and early signs of gradually improving gross margins and cash flow; however, at the same time, its scale remains small, customer concentration is high, collection cycles are long, launches depend on third parties, and the profitability inflection point has not yet truly arrived. For the market, ADA Space's value lies not in short-term profits but in whether it can prove through deliveries in the coming batches that AI smart-computing satellites are not a one-off technology demonstration but a business that can be replicated, scaled, and generate sustained cash flow.