China Satellite Communications (601698): Satellite Communications Operator Leads High-throughput Satellites to Bring New Business Space

China Satellite Communications (601698): Satellite Communications Operator Leads High-throughput Satellites to Bring New Business Space

Key points of investment Satellite communications operator leader.

Established in 2001, the company is the only satellite communications operating company in the developing country with communications satellite resources and independent control. It was listed on the Shanghai Stock Exchange in June 2019.

The controlling shareholder of the company, the actual controller is Aerospace Technology, which is China Aerospace Science and Technology Corporation.

The company’s main business is satellite space segment operation and related application services, mainly including satellite communications and broadcasting. It can provide products and services including satellite communications, satellite broadcasting, emergency protection, application services and customized services. Its main customers include radio and television related units, and telecommunications operations.Business, government departments, defense units, and large enterprises in the fields of finance, transportation, and petroleum.

The company is currently operating 16 commercial communications broadcast satellites, with satellite transponder resources covering C wavelength, Ku vertical and Ka transmission, etc. As the main carrier for vertical satellite resources to achieve global coverage, it has developed into Asia’s second largest, the world’s firstSix major fixed communications satellite operators.

High-throughput satellites are driving rapid growth in the satellite service industry.

The telecommunications satellite operation industry belongs to the satellite service industry and is a capital-intensive industry. The capital expenditure that forms the economies of scale is large and the marginal use cost expenditure.

From the perspective of the international market, due to the advancement of satellite technology, satellite supply has increased, and market competition has expanded fiercely. Until the end of 2017, there were more than 40 major fixed communications satellite operators in the world. From the domestic market perspective, only three domestic companies have satellite operations.Qualification, the company is the only satellite communications operator with satellite resources, and has a high domestic market share.

In the future, high-throughput satellites will become an important development trend of the industry. In terms of traditional communication satellites, high-throughput satellites have advantages in terms of capacity and unit cost, and have stronger capabilities in broadband access, satellite relay stations, mobile communications, and broadcast communications.The advantages of the broad competitiveness and application prospects.

We believe that from the demand side, new requirements such as high-definition programs and satellites in the future will drive the rapid development of the satellite communications industry. Specifically, high-definition programs will become the development direction of the radio and television industry.The bandwidth requirement for satellite transmission of TV programs is constantly increasing; satellite communication is the only or the most economical 南京桑拿网 communication solution for “on the move”. For shipborne communications, the length of global ocean satellite communications is seriously insufficient. For airborne communications, the futureThe penetration rate of domestic airborne WiFi is expected to increase significantly. From the perspective of in-vehicle communications, high-throughput satellite signals are more stable and the coverage is wider. At the same time, remote areas and the “Belt and Road” are expected to bring new growth space.

High-quality satellites and customer resources are the foundation of the company’s future growth potential.

As the main carrier of conventional satellite resources for global coverage, the company has developed into the second largest fixed communications satellite operator in Asia and the sixth largest in the world.

From the perspective of satellite resources, the company operates 16 commercial communications and broadcasting satellites, with satellite transponder resources covering C transmission, Ku vertical and Ka transmission, etc. The satellite communication broadcast signal covers the whole of China, Australia, Southeast Asia, South Asia, the Middle EastIn Europe, Africa, and other regions, the company’s transponder utilization rate is higher than the industry average, and it is flexible to respond to changes in the market environment. From the perspective of customer resources, the company has a long-term stable relationship with major customers. According to the prospectus, the company’s market share has reached 80%, is the main satellite space segment operation service provider in the domestic market; from the perspective of business layout, the company is actively building high-throughput satellites, and cooperates with domestic Internet companies, telecommunications operators, aviation and other industries to expand satellite applicationsIn the service field, we will create a Ka Broadband Satellite commercial application model with Chinese characteristics.

Investment suggestion: As the only domestic satellite communication operator with independent and controllable commercial communication and broadcasting satellite resources, the company has high-quality communication satellite resources and rich frequency orbit resources, has international advanced nature, and independent and controllable satellite Internet application service capabilities.High market share.

With the construction and operation of high-throughput satellites in the future, it will bring new space for the company’s performance growth.

We expect the company’s net profit for 2019-2021 to be 4 respectively.

6.7 billion / 5.

31/6.

1.6 billion, EPS is 0.

12/0.

13/0.

15. The first coverage was given an “overweight” rating.

Risk reminders: the risk of changes in industry access policies; the risk of falling prices due to fierce international competition; the risk of overseas operations; the risk of the development of high-throughput satellite markets falling short of expectations; the risk of competition in different communication means; the risk of fluctuations in macroeconomic cyclesSystemic market risk