The Five Dragons of Commercial Aerospace: Who Will Become China's SpaceX?

SpaceX’s valuation is nearly $1.8 trillion. Why? Domestic five private rocket companies combined are just over 100 billion. What’s the difference? Is Blue Arrow’s current situation similar to SpaceX in 2015?

By 2026, the global commercial space industry will reach its peak. SpaceX is about to launch the world’s largest IPO, with a valuation rumored to exceed $1.75 trillion, raising up to $50 billion, rewriting the global IPO record. Meanwhile, Chinese commercial space is also on the rise—Blue Arrow, Tianbing Technology, CAS Space, Galactic Energy, and Galaxy Power, known as the “Five Little Dragons,” have a combined valuation surpassing 100 billion RMB, collectively rushing to the capital markets.

The total valuation of China’s Five Little Dragons is only 0.8% of SpaceX’s. Why is the gap so big? Can China’s version of SpaceX really emerge?

01

How difficult is the rocket business?

To understand the plight of the “Five Little Dragons,” we need to grasp three “dead ends” in commercial space.

First, the burn rate is comparable to a “money-consuming beast.” Rockets are not smartphones—they can’t be sold and improved simultaneously; nor are they software that can be rapidly iterated. From engine ignition to successful orbit insertion, every second burns through funds. Take Blue Arrow as an example: in the first half of 2025, revenue was 36.43 million yuan, but net loss reached 635 million yuan. Among this, R&D expenses alone consumed 360 million yuan, nearly 10 times the same period’s revenue.

Source: Blue Arrow IPO prospectus

Looking back at SpaceX, how much did it spend? From 2006 to 2008, SpaceX failed three consecutive rocket launches, nearly exhausting its startup capital of $100 million, and was on the brink of bankruptcy. It wasn’t until September 2008, when the Falcon 1 successfully entered orbit, that this “near-death” period ended. It took SpaceX 13 years from founding to first profit. China’s commercial space only officially started in 2015, just 10 years ago.

Second, technical bottlenecks are daunting. The cost of a first-stage rocket accounts for about 60% of the total. Achieving recovery and reuse five times could reduce launch costs by about 70%. SpaceX relies on this technical route, bringing down Falcon 9’s single-launch cost from tens of millions of dollars to the tens of millions level.

But this path is not smooth. In April 2015, a Falcon 9 recovery test failed due to a throttle valve malfunction; two months later, the rocket exploded after launch, caused by a rupture in the liquid oxygen tank support. Musk warned the team: “The truth in the rocket industry is: to be qualified, you must score 100 points.”

From the first flight in 2010 to the first successful on-land recovery in 2015, SpaceX took five years and at least four failures; then, after another year and two more failures, it achieved offshore platform recovery in 2016.

Domestic players are still tackling the ultimate challenge of “first-stage recovery.” On December 3, 2025, Blue Arrow’s Zhuque-3 launched into orbit, but the recovery test failed. Pang Zhihao, chief scientist of China’s space exploration technology, commented: “The second-stage precise orbit insertion verified the reliability of core technology and is a major milestone. Although the recovery failure is regrettable, it is not useless— it completed separation, attitude adjustment, engine ignition, and deceleration processes, and the data collected will be key for future improvements.”

Third, the capital market is re-evaluating. This sector has no historical reference, no stable cash flow; the only story is “future potential.” But capital is pragmatic. When Blue Arrow and Tianbing are still losing money, why should investors believe they can deliver on their promises?

The answer lies in three “certainties.”

Who can become China’s SpaceX?

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02

Why are investors willing to bet? Three “certainties” support a valuation of over 100 billion

The core of a 100-billion valuation is just three words: certainty.

First, order certainty: the “ballast stone” of national strategy. China’s plans for the “State Grid Constellation” and “Qianfan Constellation” will launch over 27,000 low-earth orbit satellites. This is an extremely clear order. According to Galaxy Securities, in 2026 alone, the launch market for these two constellations will approach 26.8 billion yuan. Blue Arrow has already secured formal launch contracts with China SatNet and Yuanxin Satellite; others have also made some gains. This is not “pie in the sky”—it guarantees revenue for the coming years.

More importantly, according to ITU’s “first-come, first-served” rule, applicants must launch their first satellite within 7 years of application, and complete 10% of the constellation within 9 years. For example, GW Constellation needs to deploy about 1,300 satellites by the end of 2029, averaging 260 per year. This means orders are not only certain but also have clear time pressures.

Second, cost feasibility: China’s supply chain advantages. Due to differences in supply chain systems, China’s expendable rockets can quickly approach SpaceX’s Falcon 9 in launch costs.

Fanna, CFO of CAS Space, revealed that the current cost of the Long March 6 (Lijian-1) is about 50,000 yuan per kilogram; by year’s end, the larger liquid-fueled Long March 2 (Lijian-2) will reduce costs to around 30,000 yuan per kilogram. In comparison, Falcon 9’s cost per kilogram is about 21,000 RMB. Even in an expendable state, Chinese rockets’ launch costs are already close to Falcon 9.

“Ultimately, it’s because China’s supply chain system differs from the US.” Fanna explained that China’s manufacturing chain is highly segmented and responsive; once market demand appears, upstream and downstream companies can quickly scale up.

Third, technological path certainty: a “unified answer” emerging globally. The consensus is clear: only reusable liquid rockets can reduce costs. Liquid rockets are the only direction for all players.

Blue Arrow and Tianbing insist on a pure liquid route; CAS Space and Galactic Energy are also shifting fully to liquid. The convergence of technical routes means the track is clear, capital can confidently bet on “who will succeed first.”

03

What supports SpaceX’s $1.75 trillion valuation?

SpaceX’s valuation is more than 100 times China’s “Five Little Dragons.” Why?

Core support 1: Starlink’s “cash cow” effect. SpaceX has built a profitable closed loop of “launch services + Starlink operations + deep space transportation.” Huaxi Securities (002926) reports that Starlink has evolved from a single satellite network to a “manufacturing + operation + technological premium” integrated business model, becoming the core anchor for SpaceX’s valuation leap.

By March 2026, over 10,000 Starlink satellites are in orbit. Huaxi Securities predicts that Starlink’s revenue in 2026 will reach $15.6 billion, with a 30x P/S valuation, corresponding to a target market cap of $468 billion. This is the “valuation ballast” for SpaceX.

Core support 2: The “second growth curve” of space data centers. Facing power shortages and heat dissipation limits in ground data centers, SpaceX is turning to space. Musk’s latest idea: “Launching 1 million tons of satellites annually, each equipped with 100 kW of power, can add 100 GW of AI computing capacity each year.”

SpaceX plans to use part of the IPO funds to develop space-based data centers, including procuring chips needed to operate these facilities.

Core support 3: Cost revolution based on first principles. Around 2010, Musk used first principles to analyze engine costs, discovering that traditional products had an “idiot index” (total cost/material cost) that was too high. He set a goal: reduce engine costs from $2 million to $200,000 within 12 months. The team achieved significant cost reductions through in-house core component development.

Today, with fully reusable Falcon 9, SpaceX has brought marginal launch costs down to nearly $15 million, and with five reuses, profit margins can reach about 68%. This cost structure gives SpaceX a pricing advantage over traditional giants.

So, what about China’s “Five Little Dragons”? What supports their valuation?

Take Blue Arrow: Zhuque-3 aims for a cost below 20,000 yuan per kilogram, only 1/5 of traditional rockets. If first-stage recovery and reuse are achieved, costs will further drop. CAS Space estimates that in 3-5 years, with mature reusable tech and scaled launches, China’s rocket costs could decrease by another 50%.

Investors focus not on current revenue but on future profit potential. An insider from CAS Space said, “There is hope to break even within three years.”

04

Who can become China’s “SpaceX”?

Returning to the core, the essence of this space “battle for position” is not about who runs faster, but who can “bear the burden.”

SpaceX’s success is not just technological but also a business model triumph—recovery to cut costs, operating “Starlink” to generate revenue, forming a closed commercial loop. Chinese players need not only to catch up technologically but also to find their own “Starlink.”

Blue Arrow’s secret weapon is full industry chain self-research. From engines to the rocket body, from manufacturing to launch, everything is controlled in-house. Zhuque-3’s stainless steel structure is cheaper than traditional aluminum alloys, like giving the rocket a durable, cost-saving armor.

Tianbing’s secret weapon is 3D printing technology. Founder Kang Yonglai, once the youngest research director at China Academy of Space Technology, led a team to use 3D printing to produce engine parts, creating the world’s first liquid rocket powered by coal-based kerosene.

CAS Space’s secret weapon is the national team gene. Incubated by the Chinese Academy of Sciences’ Mechanics Institute, it is the first domestic mixed-ownership commercial space enterprise with deep technical accumulation. The Long March 6 (Lijian-6) has achieved “26 satellites in one launch,” breaking China’s record for the number of satellites launched per mission.

The common secret of the “Five Little Dragons” is China’s unique industrial scale and supply chain dividends. Once technological breakthroughs occur, leveraging strong domestic manufacturing capabilities, costs can be driven down to astonishing levels.

These advances are the results of the past five years. Musk’s “never give up” attitude has enabled rocket recovery; Blue Arrow and others are writing their own stories with the same persistence.

Who will cross the finish line first? The answer is not in the wind or reports, but in every “try again” after failure.