Zhongke Aerospace’s STAR Market IPO was just accepted and immediately selected for on-site inspection; it still hasn’t turned a profit, with cumulative losses of nearly 3.9 billion yuan.

Ask AI · How does Zhongke Yuhang balance R&D and profitability amid nearly 3.9 billion yuan of losses?

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Blue Whale News April 2nd (Reporter Wang Xiaonan) On April 1st, the China Securities Industry Association released the results of the second batch of on-site inspection lottery for 2026 initial public offerings. Zhongke Yuhang Technology Co., Ltd. (hereinafter referred to as “Zhongke Yuhang”), a leading domestic private commercial launch vehicle company, was selected for inspection.

Just the day before, on March 31st, Zhongke Yuhang’s application for a Sci-Tech Innovation Board IPO was accepted by the Shanghai Stock Exchange. The company plans to raise 4.18 billion yuan, which will be used for the development of reusable large-scale launch vehicles, reusable spacecraft and launchers, a reusable liquid engine industrial base, and to repay bank loans and supplement working capital.

On the same day, another commercial space company, Blue Arrow Aerospace Space Technology Co., Ltd. (hereinafter “Blue Arrow Aerospace”), which is also pursuing a listing, suspended its IPO on the Sci-Tech Innovation Board due to the financial data in its application documents being outdated and requiring supplementary submission.

Currently, the global and domestic commercial space industry is developing rapidly. Large-scale space infrastructure projects such as low Earth orbit satellite internet constellations are accelerating, creating strong demand for high-capacity, low-cost, and highly reliable rocket launch services. The commercial launch vehicle market remains robust. Besides Zhongke Yuhang and Blue Arrow Aerospace, leading companies like Xinghe Power and Tianbing Technology are also in the IPO guidance stage. The domestic commercial space track is in a concentrated sprint phase for IPOs, seemingly competing for the title of “First Commercial Space Stock.”

Pre-IPO valuation reaches 14.98B yuan

As a high-tech enterprise incubated by the Institute of Mechanics, Chinese Academy of Sciences, Zhongke Yuhang was established at the end of 2018. Currently, the company mainly engages in the research, production, and launch services of a series of medium and large commercial launch vehicles, and is exploring new space economy sectors such as space manufacturing, space science experiments, and space tourism. Its main customers include satellite manufacturers, low Earth orbit communication constellation operators, remote sensing satellite operators, scientific research institutions, national project users, and foreign clients.

From 2022 to 2024 and the first three quarters of 2025 (hereinafter referred to as “reporting period”), Zhongke Yuhang’s launch service revenue showed rapid growth, mainly due to an increase in successful launches, with 1, 1, 3, and 2 successful launches respectively, generating launch service revenues of 1.2089 million yuan, 66.3272 million yuan, 226 million yuan, and 81.5M yuan, accounting for 20.31%, 85.76%, 93.01%, and 98.13% of the main business income during each period.

According to data from Frost & Sullivan, Zhongke Yuhang, Xinghe Power, Blue Arrow Aerospace, Xingjie Glory, Oriental Space, and Tianbing Technology, representing Chinese private commercial launch vehicle companies, have all achieved successful orbital launches. By the end of 2025, Zhongke Yuhang’s total payloads launched exceed 11 tons, ranking first among Chinese private commercial launch companies. Its main order types include commercial, scientific research, national missions, and overseas orders.

In 2024 and 2025, Zhongke Yuhang’s market share in China’s private commercial rocket market by launch payload weight is approximately 50% and 63%, respectively. Its payload capacity and operating income are the highest in the private commercial launch industry. As of the date of the prospectus signing, the Long March 1st has been successfully launched 10 times, successfully delivering 84 satellites and over 11 tons of payloads into orbit, making it one of the most mature commercial launch vehicles currently in operation domestically.

As the first domestically owned mixed-ownership commercial rocket company, Zhongke Yuhang has been favored by the capital market even before applying for a Sci-Tech Innovation Board IPO. According to Tianyancha, Zhongke Yuhang has completed 8 rounds of financing, including Yunhui Capital, Guotou Securities, CITIC Juxin, and others. After the last round of financing in September 2025, the company’s valuation was approximately 14.98B yuan.

In terms of equity, Zhongke Yuhang’s shareholders include Zhongke Lisun (SS), a subsidiary of the Institute of Mechanics, Chinese Academy of Sciences, as well as state-owned capital such as National Investment Group, Guangzhou Investment Group, Galaxy Guoke, and market-oriented capital like Yunhui Capital and Shaanxi Qingchuang. Zhongke Lisun (SS) is the second-largest shareholder, holding 20.58% of shares.

The prospectus shows that Zhongke Yuhang has no single shareholder holding more than 30%, and no controlling shareholder. Yang Yiqiang, chairman and general manager of Zhongke Yuhang, controls 34.71% of voting rights through his subsidiaries Pengyi Junlian, employee shareholding platform Tianjin Tansuo, Huzhou Zhongqing, and the concerted action persons Guoke Yuhang, making him the actual controller.

Yang Yiqiang, the founder of Zhongke Yuhang, has a “national team” background and extensive experience in space. From July 1987 to December 2018, he served as model assistant at China Academy of Launch Vehicle Technology, dispatcher for a key national model, and deputy commander for a key national model. Since April 2019, he has been director of the China Academy of Space Flight Technology and director of the Beijing Key Laboratory of Reusable Launch Vehicle Mechanics and Flight Control.

Unprofitable with nearly 3.9 billion yuan in accumulated losses

Although Zhongke Yuhang is highly favored by capital and its valuation approached 15B yuan before listing, the company is not profitable yet.

During the reporting period, Zhongke Yuhang’s operating revenues were 5.9529 million yuan, 77.72M yuan, 244 million yuan, and 84.2239 million yuan, with net profits attributable to shareholders of -3.88B yuan, -512 million yuan, -861 million yuan, and -749 million yuan, respectively, accumulating losses of 184M yuan. Zhongke Yuhang states that the company’s products have not yet achieved large-scale mass production, and factors such as high R&D investment intensity and large share-based payment expenses have led to losses during the period. The company plans to continue R&D investments based on strategic development, which may result in continued unprofitability in the near future.

Commercial space is a capital-intensive and technology-driven industry, involving multidisciplinary crossovers, high system complexity, and key technological breakthroughs often requiring long-term, large-scale R&D investments. To achieve technological innovation and breakthroughs, Zhongke Yuhang invests heavily in R&D, with high R&D expenses. During the reporting period, R&D expenses were 1.84 billion yuan, 121M yuan, 2.98 billion yuan, and 298M yuan, with R&D expense ratios of 3086.91%, 156.10%, 122.13%, and 362.49%, showing an overall upward trend.

To build an autonomous full-chain launch capability, Zhongke Yuhang has significant fixed asset investments and high depreciation and amortization costs. During the period, the company recorded a total of 38.6047 million yuan in depreciation of fixed assets, 106 million yuan in depreciation of right-of-use assets, 114 million yuan in amortization of intangible assets, and 96.5273 million yuan in amortization of long-term deferred expenses.

Meanwhile, to attract and retain talented personnel, Zhongke Yuhang has implemented multiple equity incentive plans, resulting in substantial share-based payments. During the period, share-based payment expenses recognized due to equity incentives were 90.9981 million yuan, 177 million yuan, 148 million yuan, and 72.0254 million yuan, significantly impacting net profit.

As of the end of the reporting period, Zhongke Yuhang’s consolidated unamortized losses amounted to 305M yuan. It is expected that after the IPO and listing, the accumulated unamortized losses will continue to exist, and the company will not be able to distribute cash dividends in the short term, which may affect investors’ returns.

It is worth noting that because the company’s launch vehicles have not yet achieved mass production, the high cost of single-rocket production means that launch service revenue does not fully cover rocket costs, resulting in negative gross profit. Additionally, since the revenue from each launch cannot cover its costs, some contracts are recognized as loss-making at signing, leading the company to accrue corresponding estimated liabilities, increasing current operating costs and further deepening negative gross profit. During the reporting period, Zhongke Yuhang’s overall gross profit margins were -549.69%, -40.45%, -82.92%, and -232.8%.

Expanding reusable rockets

China’s satellite internet construction has entered a dense deployment phase, with huge market demand providing broad development space for commercial space enterprises. According to plans, the country’s two largest satellite internet constellations will deploy nearly 30k satellites, and the launch of commercial remote sensing satellites is also booming.

In the future, as satellite networking demand continues to grow, revenue from Chinese commercial launch services is expected to accelerate. According to Frost & Sullivan, China’s commercial launch service revenue is projected to reach 81.59 billion yuan by 2030, with a compound annual growth rate of 72% from 2024 to 2030.

In this hot IPO season for commercial space, competing to be the “First Commercial Space Stock” seems to be a top priority for many companies, but the IPO process is not easy compared to just launching rockets.

On December 26, 2025, the Shanghai Stock Exchange issued the “Guidelines for the Application of the Ninth Set of Listing Standards for the Sci-Tech Innovation Board — Applicable to Commercial Rocket Companies,” which, following the fifth set of standards, specifies four key aspects: significant technological advantages, phased achievements, approval by relevant national authorities, and large market space. Among these, phased achievements are explicitly defined as: “At the time of application, at least one successful launch of a medium or large reusable launch vehicle with payload into orbit.”

Clearly, medium and large reusable rockets are the core development direction in commercial space, and successful payload launches are strong validation of a rocket’s carrying capacity and commercial value.

On December 3, 2025, Blue Arrow Aerospace’s Zhuque-3 reusable launch vehicle was launched into orbit, marking China’s first attempt at first-stage recovery. On December 31st of the same year, Blue Arrow Aerospace submitted its application to the Sci-Tech Innovation Board under the fifth set of standards.

The prospectus shows that Zhongke Yuhang’s IPO application this time is based on the second set of standards, which requires a “market value of no less than 1.5 billion yuan, annual revenue of at least 200 million yuan in the most recent year, and R&D investment in the most recent three years accounting for at least 15% of the total revenue during that period.” Although Zhongke Yuhang did not apply under the fifth set of standards, in January this year, the company’s Ligong-1 launch vehicle successfully completed its first flight carrying a microgravity metal laser additive manufacturing prototype, and the payload fairing was recovered after landing.

Public data shows that a single-use rocket costs about 110 million to 180 million yuan per launch, with a corresponding launch cost of about 115k yuan per kilogram; reusable rockets have reduced the cost to around 70 million yuan per launch, a reduction of over 40%. Some companies aim to push costs below 20k yuan per kilogram. Compared to SpaceX’s Falcon 9, which costs about 18k yuan per kilogram, China’s current gap is roughly sixfold, but reusable technology is expected to narrow this gap to within three times.

From the use of raised funds, it is also evident that the company is actively developing reusable rocket technologies. Zhongke Yuhang plans to raise 4.18 billion yuan, with over 80% allocated to the development of reusable large launch vehicles and reusable spacecraft and launchers.

The company also states that it will continue to accelerate the development of products such as the heavy-lift Long March 2H, Long March 3, reusable series of the Ligong family, and the Reign series of reusable liquid engines, focusing on high capacity, low cost, and high reliability.