China Satellite Communications Co., Ltd. (601698)

Stock Analysis Report | Industry: Satellite Communications Operation Services | Report Date: September 13, 2026 | 2026-09-11 close (market data, capital flow data); technical indicators (MA/MACD/RSI) from Investing.com, with page timestamps of 2026-08-28 and 2026-09-03 respectively, representing slightly lagged readings; East Money Thousand-Stock Reviews and Baidu Stock technical analysis are as of 2026-09-11.

This report is automatically compiled and generated by AI based on public information, and is for reference only. It does not constitute investment advice.

1. Core Summary

China Satellite Communications (601698.SH)'s 2026 semi-annual report shows that the company achieved operating revenue of RMB 1.229 billion, up only 0.66% year-on-year, while net profit attributable to shareholders was RMB 113 million, down sharply 37.36% year-on-year, and non-recurring net profit attributable to shareholders was RMB 94.1 million, down 45.42% year-on-year, with a weighted ROE of only 0.70%. The company explicitly attributes the profit decline primarily to an increase in satellite depreciation year-on-year, which directly reflects that under its asset-heavy operating model, the front-loaded depreciation pressure brought by newly commissioned satellites has not yet been absorbed by revenue growth. Combined with full-year 2025 net profit attributable to shareholders of RMB 441 million (-2.92%) and 2026Q1 net profit attributable to shareholders of RMB 26.84 million (-61.90%), the company's profitability has come under pressure for multiple consecutive periods, with a notable characteristic of revenue growth without profit growth.

Structural divergence is the core clue to understanding the company's current fundamentals. In 2025, domestic revenue was RMB 2.089 billion (+8.85%), with a gross margin of 37.25% (+4.62pct), benefiting from high-orbit GEO license protection and HTS product mix upgrades; while overseas revenue was RMB 556 million (-10.64%), with a gross margin of only 0.16% (year-on-year -12.32pct), with the domestic-overseas gross margin scissors gap exceeding 37 percentage points. The company explicitly stated in its annual report that it would "strive to overcome the impact of Starlink on international business." Meanwhile, accounts receivable book balance rose from RMB 420 million at end-2024 to RMB 656 million at end-2025, an increase of 56.05%, far exceeding the 4.08% revenue growth rate, with accounts receivable/operating revenue rising from 16.54% to 24.80%, showing signs of weakening collection quality.

At the valuation level, as of the 2026-09-11 close of RMB 24.16, total market capitalization was approximately RMB 102.06 billion, PE(TTM) approximately 273.04x, static PE approximately 231.31x, dynamic PE (annualized based on 2026H1) approximately 451x, while the median P/E of the "Telecommunications, Radio and Television and Satellite Transmission Services" industry to which the company belongs is only about 32.11x, with the company's valuation significantly higher than the industry level. On the technical front, the stock price has cumulatively retraced about 55% from its 2026-01-12 high of RMB 53.85, and is down about 33% year-to-date. Short-term moving averages MA5/MA10/MA20 are highly converged around RMB 24.0~24.2, with MA200 (approximately RMB 25.9~26.4) forming overhead resistance, and the composite moving average signal is bearish.

2. Company Overview

2.1 Basic Information

2.2 Main Business and Product Layout

• Satellite resource operation services (satellite space segment operations)—core business, 2025 "satellite space segment operations" revenue RMB 2.48034 billion, accounting for 92.07% of main business revenue; "satellite space segment operations related application revenue" RMB 117.73 million (4.37%); others RMB 95.91 million (3.56%)
• Network system integration services—satellite communications network systems for emergency (emergency + insurance group procurement, Hebei PICC emergency satellite three-network connectivity), energy (Sinopec, State Grid, CNOOC, China Southern Power Grid), power IoT, natural resources/forestry and grassland and other industries
• Comprehensive information services—centered on the "Haixingtong" marine satellite internet platform and aviation airborne satellite internet

2.3 Industry Chain Upstream/Downstream Position and Cost-Profit Structure

The company is essentially a satellite space segment operator that "buys satellites + buys launches + builds ground stations" and then leases transponders/bandwidth assets, positioned in the mid-to-upstream asset-heavy segment of the industry chain; upstream is highly dependent on intra-group satellite manufacturing, with extremely high supplier concentration, while downstream is mainly government/state-owned/radio and television industry customers. Domestically, it enjoys strong bargaining and pricing power protected by GEO licenses, while in open overseas markets it faces structural displacement from low-orbit constellations (Starlink, etc.).

• Core inputs are not traditional raw materials, but satellite manufacturing, rocket launches, and ground equipment (the company is essentially an operator that "buys satellites + buys launches + builds ground stations" and then leases transponders/bandwidth assets)
• Top five supplier procurement (2025): Total procurement of RMB 1.380 billion, accounting for 75.27% of annual total procurement; of which China Aerospace Science and Technology Corporation procurement was RMB 948.54 million, accounting for 51.73%—a single supplier (its own controlling shareholder) accounts for more than half of procurement. This data comes from a single source, Tongdaxin F10/Chaguwang (gubit.cn), and could not be cross-verified word-for-word with the company's annual report original text
• Historical top five supplier proportions: 2023 76.15%, 2024 58.41%, 2025 75.27% (Sina Finance Eagle Eye Warning, citing annual report)
• At the industry level: Satellite manufacturing (satellite platforms/payloads/components/assembly) and launch segments have high technological value-added, and suppliers have strong bargaining power (Qianzhan/Zhiyan Consulting, industry research basis); China's main satellite manufacturers are China Satellite (600118) and units under CASC (such as China Academy of Space Technology/Fifth Academy); satellite communications ground equipment providers include Aerospace Hengxing, CETC 54th Institute, Haige Communications, Huali Chuangtong, etc.
• Cost structure: Dominated by depreciation of fixed assets such as satellites + ground station operations and maintenance, not raw material-driven. In 2023, fixed asset depreciation was approximately RMB 1.137 billion (of which machinery and equipment approximately RMB 1.113 billion, mainly corresponding to satellite assets), and machinery and equipment impairment of approximately RMB 268 million was recognized (2023 annual report). Fixed assets rose from RMB 9.499 billion at end-2023 to RMB 10.475 billion at end-2025, while revenue/original value of fixed assets fell from 0.28 to 0.25 (Eagle Eye Warning), indicating that new satellite commissioning did not bring proportional revenue growth
• Related party transaction note: Satellite procurement mainly comes from the controlling shareholder system (CASC and its subsidiaries), which is "internal procurement," both a resource guarantee and a source of cost rigidity; overall assessment is weak bargaining power vis-à-vis upstream (group suppliers)
• Top five customer sales (2025): Total RMB 1.060 billion, accounting for 40.07% of operating revenue (Tongdaxin F10/Chaguwang gubit.cn data, single source). In 2021, the corresponding top five customers were RMB 810 million, accounting for 30.74% (China Securities Journal citing 2021 annual report)—concentration shows an upward trend (basis may not be fully consistent, cite with caution)
• Customer structure: Radio and television safe broadcasting system (cumulative provision of TV direct broadcast services to over 154 million households in remote areas, participation in radio and television dedicated satellite projects, direct broadcast satellite projects), government departments and emergency systems, energy central enterprises (Sinopec, State Grid, CNOOC, China Southern Power Grid), natural resources/forestry and grassland, maritime shipping and shipbuilding, aviation (airborne internet, jointly won Hainan Airlines Group aviation internet project in 2026H1), overseas telecom operators (Indonesia, Thailand national telecom, Pakistan, Maldives, etc.) and Chinese enterprises in the Middle East and Africa
• Bargaining structure: Unlike "auto parts Tier-1 facing annual price reductions" or "consumer goods squeezed by retailers," satellite communications downstream is mainly government users and industry users, with relatively stable demand and few midstream operators; industry research generally believes downstream bargaining power is weak; at the same time, domestic GEO licenses are monopolistic, giving the company strong domestic bargaining and pricing power
• Key risk evidence—overseas: 2025 overseas revenue RMB 556 million (year-on-year -10.64%), gross margin only 0.16% (year-on-year -12.32pct), the company's annual report states "strive to overcome the impact of Starlink on international business"; domestic revenue RMB 2.089 billion (+8.85%), gross margin 37.25% (+4.62pct). Domestic-overseas gross margin scissors gap exceeds 37 percentage points. Revenue by region (2025): domestic RMB 2.0889 billion (78.98%), overseas RMB 555.9 million (21.02%)
• Accounts receivable (book balance): RMB 655.79 million at end-2025, up 56.05% from RMB 420.25 million at end-2024 (far exceeding the +4.08% revenue growth rate), which the company explains as "decreased collection of operating business receipts"; accounts receivable/operating revenue: 2023 14.65% → 2024 16.54% → 2025 24.80%, continuously rising; accounts receivable/total assets rose from 1.69% to 2.93% (Sina Finance Eagle Eye Warning, citing annual report); accounts receivable turnover ratio: 2023 6.13x → 2024 6.33x → 2025 4.92x (-22.28%); inventory turnover ratio 2025 68.51x (-39.27%); prepayments: end-2025 approximately RMB 105-114 million, up approximately 100% from RMB 57.14 million at beginning of period (Eagle Eye Warning reports RMB 114 million; 2025 annual audit report shows end-of-period RMB 105,015,277.31 = approximately RMB 105 million, the two bases/timings differ, needs verification); payables/cash side: the company has almost no interest-bearing debt (asset-liability ratio 9.63%, monetary funds RMB 5.443 billion, plus approximately RMB 2.5 billion in wealth management products), indicating that its "working capital occupation" does not rely on upstream credit, but rather on lengthening downstream collection + front-loaded asset-heavy depreciation. Overall assessment: weak bargaining power vis-à-vis upstream (group suppliers), some pricing power vis-à-vis domestic downstream but collections are slowing.
• Top five customer sales (2025) totaled RMB 1.060 billion, accounting for 40.07% of operating revenue, source is Tongdaxin F10/Chaguwang (gubit.cn) single source, could not be cross-verified word-for-word with the company's annual report original text; 2021 corresponding top five customers were RMB 810 million, accounting for 30.74% (China Securities Journal citing 2021 annual report), basis may not be fully consistent, citations must note source and year; top five supplier procurement (2025) totaled RMB 1.380 billion, accounting for 75.27% of annual total procurement, of which controlling shareholder China Aerospace Science and Technology Corporation accounted for 51.73% (2023 76.15%, 2024 58.41%, 2025 75.27%, source Sina Finance Eagle Eye Warning citing annual report), also a single-source basis; additionally "80% market share of domestic satellite communications operations" and "Asia's second-largest, world's sixth-largest satellite communications operator" come from a single third party, Zhiyan Consulting, with an early timing (around 2023), and could not be cross-verified, citations must note source and limitations.

China Satellite Communications is positioned in the mid-to-upstream "asset-heavy satellite space segment operations" segment of the industry chain: leasing transponders and bandwidth from self-built/self-purchased GEO satellite resources, a model characterized by high fixed assets, high depreciation, and license protection, with near-monopoly domestically but weak growth and low ROIC (2025 weighted ROE 2.79%, ROIC approximately 1.86%); it is neither upstream high-value-added manufacturing/launch, nor downstream high-margin branded applications. The keys determining its future gross margin and profit improvement: ① domestic HTS (Ka high-throughput) product mix upgrade replacing "selling transponder MHz," diluting sunk depreciation; ② whether overseas can stop the bleeding from being displaced by low-orbit (Starlink/Qianfan/GW); ③ whether second curves such as low-orbit and direct-to-device satellite can be realized. Generalized statements like "intense industry competition" alone are insufficient to characterize its true situation.

3. Financial Data and Valuation Analysis

3.1 Recent Operating Performance

Financial data is based on the company's latest disclosed 2026 semi-annual report (as of 2026-06-30, disclosed 2026-08-24). 2026H1 non-recurring net profit attributable to parent was RMB 94.11 million, year-on-year -45.42%; basic earnings per share RMB 0.0268, year-on-year -37.24%; weighted average ROE 0.70%. Quarterly breakdown: 2026Q1 net profit attributable to parent approximately RMB 27 million (RMB 26.8415 million), 2026Q2 net profit attributable to parent approximately RMB 86 million, quarter-on-quarter +221%. 2026Q2 gross margin 25.77% (year-on-year -3.16pct, quarter-on-quarter +6.73pct), net margin 17.21%. 2026H1 period expenses RMB 78.004 million (expense ratio 6.35%, year-on-year +2.75pct); R&D expenses year-on-year +81.00%, financial expenses +15.92%, administrative expenses +4.52%, selling expenses -3.88%. Asset-liability ratio 9.82%, H1 gross margin approximately 22.80%, net margin approximately 13.04%. FY2024 annual report audited by BDO, disclosed 2025-04-02, non-recurring net profit attributable to parent RMB 231.58 million, year-on-year -13.94%; EPS RMB 0.1076; weighted average ROE 2.92%. FY2023 EPS RMB 0.0826. FY2025 annual report disclosed 2026-04, gross margin 29.45% (+1.75pct vs 2024), net margin 20.02% (-2.33pct vs 2024), ROE approximately 2.79%; by region domestic revenue RMB 2.089 billion (+8.85%), overseas revenue RMB 556 million (-10.64%), domestic gross margin 37.25%, overseas gross margin only 0.16% (year-on-year -12.32pct); 2025Q4 single-quarter revenue RMB 793 million (+1.2%), net profit attributable to parent RMB 155 million (+689.7%). 2025 first three quarters revenue RMB 1.852 billion (+5.35%), net profit attributable to parent RMB 286 million (-40.58%). FY2022, FY2023 year-on-year growth rates are not provided in the research notes.

The company's announcement basis shows that the decline in 2026H1 net profit attributable to parent is primarily due to increased satellite depreciation year-on-year. Net profit attributable to parent has declined continuously since 2025 (2025H1 -55.59%, full-year 2025 -2.92%, 2026H1 -37.36%), primarily due to increased satellite depreciation/amortization and changes in business structure, while revenue has maintained slight growth. Note that historical net profit includes non-recurring factors: 2022 RMB 923 million and 2024 RMB 454 million both include significant non-recurring gains/losses; the non-recurring basis (2024 -13.94%) better reflects the core business, and cross-year comparisons require caution. On subsidiaries, the Hong Kong-listed controlled subsidiary APT Satellite Holdings issued a 2025 annual profit warning after market close on 2026-02-12, adversely affecting the parent company's performance.

3.2 Earnings Forecast

Forecast data source is East Money/Chaguwang aggregation (as of 2026-09-09, latest rating date 2026-04-08), with only 1 institution covering (Shenwan Hongyuan), not a multi-broker consensus. Source report is Shenwan Hongyuan's "China Satellite Communications Review: Stable Domestic Business Growth, Business Structure Adjustment and Expense Fluctuations Affect Short-Term Performance" (Han Qiang/Wu Yutong/Mu Shaoyang), 2026-04-08, maintaining "Outperform." The report lowered 2026E revenue from RMB 3.91 billion to RMB 3.09 billion, and 2026E net profit attributable to parent from RMB 783 million to RMB 557 million; comparable company 2026 average PE approximately 270x (Feiwo Technology, Chaojie Co., Tongyu Communication). Earnings forecast corresponding PE: 2025A 232x, 2026E 184x, 2027E 138x, 2028E 103x; operating profit 2025A RMB 605 million, 2026E RMB 762 million, 2027E RMB 1.017 billion, 2028E RMB 1.368 billion; return on net assets 2025A 2.79%, 2026E 3.40%, 2027E 4.40%, 2028E 5.60%. Year-on-year net profit growth rates are not directly provided in the research notes. Risk note: This forecast was published on 2026-04-08, earlier than the 2026 semi-annual report (net profit -37.36%); the 2026E net profit assumption of RMB 557 million may be overly optimistic, not reflecting the drag from increased depreciation in the first half. Historical/outdated forecasts (for reference only, should not be used as current basis): Minsheng Securities 2023-11-21 initiated coverage with "Recommended," forecasting 2026E EPS 0.19 (no target price); Wisecast Finance (updated 2024-11-04) shows 2024E EPS 0.14/2025E 0.15/2026E 0.175, clearly inconsistent with actuals (2024A 0.1076, 2025A 0.1044), and has been invalidated.

3.3 Valuation Level and Institutional Ratings

Valuation level (as of 2026-09-11 close): Closing price RMB 24.16 (-0.54%, previous close 24.29); total market capitalization = circulating market capitalization approximately RMB 102.06 billion (some sources RMB 102.1 billion); total share capital = circulating share capital 4.224 billion shares (fully circulating). PE(TTM) 273.04x (consistent across multiple sources); PE(static/2025 annual report) 231.31x; PE(dynamic, annualized based on 2026H1) approximately 451.32x, with enormous differences among the three bases, citations must note basis and benchmark date. PB approximately 6.43x (attributable to parent basis, net assets per share attributable to parent approximately RMB 3.76) vs approximately 5.10x (including minority interests basis, total net assets approximately RMB 20.026 billion, approximately RMB 4.74 per share), the difference stemming from the large minority interests brought by subsidiary APT Satellite (Hong Kong-listed), citations need to specify basis. 52-week range RMB 20.07–53.88; year-to-date approximately -32.1% (as of 2026-09-09), past 1 year +10.02%. Industry comparison: The company's "Telecommunications, Radio and Television and Satellite Transmission Services" industry median P/E is only about 32.11x, while China Satellite Communications' PE of several hundred times is significantly above the industry median, at a historically high percentile. Regarding target price: currently no cross-verifiable, authoritative institutional target price has been found; it is recommended to note "no reliable broker target price available"; a Toutiao self-media article (2026-01-02) claimed that broker research reports generally gave a target price range of RMB 24–28, corresponding to 2026 PE of approximately 32–35x (and listed CITIC Construction Investment RMB 27/Guotai Junan RMB 25.5/CICC RMB 24), this content is highly doubtful and not adopted: a single self-media source cannot be cross-verified, and the internal logic is contradictory (based on 4.224 billion shares and 2026E net profit attributable to parent of approximately RMB 557 million, RMB 24–28 corresponds to market capitalization of approximately RMB 101.3–118.3 billion, PE approximately 180–210x, severely inconsistent with the claimed 32–35x PE).

4. Recent News and Announcements

4.1 2026 Semi-Annual Report Disclosure: Revenue RMB 1.229 billion, +0.66% YoY; Net Profit Attributable to Parent RMB 113 million, -37.36% YoY

China Satellite Communications (601698.SH)'s board of directors reviewed and approved the 2026 semi-annual report on 2026-08-24, disclosed on 2026-08-25 (announcement no. 2026-028, resolution of the 33rd meeting of the 3rd board of directors; full semi-annual report on 2026-08-25 in Shanghai Securities News, China Securities Journal and the SSE website). Main data: Operating revenue RMB 1.229 billion (RMB 1,228,580,915.52), +0.66% YoY; net profit attributable to parent RMB 113 million (RMB 113,068,623.50), -37.36% YoY; non-recurring net profit attributable to parent RMB 94.1 million (RMB 94,111,569.21), -45.42% YoY; basic EPS RMB 0.0268 (prior-year same period RMB 0.0427); weighted ROE 0.7047%. The company explained the main reason for the decline: increased satellite depreciation in the reporting period year-on-year. The semi-annual report is unaudited. Other: Credit impairment losses increased year-on-year during the reporting period (accounts receivable bad debts); R&D expenses +81% YoY; investing cash flow turned positive (structured deposits matured). Asset-liability ratio 9.82% (management discussion basis; consolidated basis total liabilities RMB 2.180 billion/total assets RMB 22.206 billion). Q2 single-quarter net profit declined 21.66% year-on-year (according to Sina/East Money breakdown reports on the semi-annual report). Risk warning report: Eagle Eye Warning shows China Satellite Communications' accounts receivable growth rate higher than operating revenue growth rate (2026-08-24).

4.2 2026 Q1 Net Profit Attributable to Parent RMB 26.84 Million, -61.90% YoY

China Satellite Communications' 2026 Q1 report was disclosed on 2026-04-30: net profit attributable to parent RMB 26.84 million, -61.90% YoY, EPS RMB 0.0064.

4.3 2025 Annual Report: Full-Year Net Profit Attributable to Parent RMB 441.2 Million, -2.92% YoY

China Satellite Communications' 2025 annual report was disclosed on 2026-04-01: operating revenue approximately RMB 2.541 billion, full-year 2025 net profit attributable to parent RMB 441.2 million, -2.92% YoY, EPS RMB 0.1044. (Overseas source S&P Capital IQ basis revenue RMB 2.645 billion, net profit RMB 441 million, net profit cross-verifiable; revenue basis differs, company announcement basis adopted.)

4.4 No Earnings Pre-announcement Found for 2026H1 (Difference from Same Period in 2025)

No earnings pre-announcement/pre-increase/pre-decrease announcement was found for China Satellite Communications for 2026H1; the company directly disclosed the semi-annual report. Comparison: In 2025, a semi-annual earnings pre-announcement was issued on 2025-07-12 (pre-announcing semi-annual net profit of RMB 180 million, change -56%); no such pre-announcement was found for 2026. This is a difference to note (may be undisclosed, or may be a search omission).

4.5 Board Re-election: 2026 First Extraordinary Shareholders' Meeting Elects 4th Board of Directors, Sun Jing Elected Chairman

The 3rd board of directors expired in August 2026. On 2026-08-28, the 2026 First Extraordinary Shareholders' Meeting was held: shares attending 3,058,353,659, accounting for 72.3976%; cumulative voting elected the 4th board of directors—non-independent directors: Sun Jing, Ma Haiquan, Li Haijin, Liu Yong, Yang Yike; independent directors: Jin Ye, Li Shoushuang, Li Changzhao. Announcement no. 2026-030. On 2026-08-28, the first meeting of the 4th board of directors was held: Sun Jing elected as chairman; according to Economic Observer Network, Ma Haiquan serves as general manager (2026-09-05 report). Announcement no. 2026-031. On 2026-08-29, Lu Zheng was elected as employee representative director of the 4th board of directors (announcement 2026-029). On 2026-08-29, board secretary appointed (announcement 2026-032, former board secretary Lü Jingwei). Note: Ma Haiquan as general manager comes from a single media statement by Economic Observer Network; in the company announcement (2026-031) search excerpts, only the election of Sun Jing as chairman was confirmed; the general manager appointment should be based on the announcement original text, marked as single-source pending verification.

4.6 Controlling Shareholder's 24 CASC EB Exchangeable Bond Fully Converted, Delisted Early on April 3, 2026

China Aerospace Science and Technology Corporation completed the issuance on 2024-08-29 of the 2024 non-public issuance of science and technology innovation exchangeable corporate bonds to professional investors (first tranche), issuance scale RMB 6.1 billion, 3-year term, abbreviated as 24 CASC EB, code 137190; conversion period 2025-03-03 to 2027-08-29. As of the 2026 semi-annual report: This exchangeable bond has been fully converted, and was delisted early on April 3, 2026; the company issued on 2026-04-03 the "Announcement on the Completion of Delisting of Exchangeable Corporate Bonds Publicly Issued by the Company's Controlling Shareholder and the Proposed Cancellation of Exchangeable Corporate Bond Guarantee and Trust Registration" (2026-016). 2026H1 CASC - CICC - 24 CASC EB Guarantee and Trust Property Special Account held 176,326,694 shares (4.17%), a decrease of 119,609,266 shares during the reporting period; the special account's shareholding is pledged for 176,326,694 shares. The company stated it will not result in a change in controlling shareholder or actual controller. Previously, on 2025-07-25 and 2025-09-10, there were announcements on equity changes of shareholders holding more than 5% reaching the 1% threshold.

4.7 2025 Annual Equity Distribution Implementation: RMB 0.314 per 10 Shares (Tax Inclusive)

China Satellite Communications' 2025 annual equity distribution implementation: RMB 0.314 per 10 shares (tax inclusive, after tax RMB 0.2826); record date 2026-06-24, ex-dividend date 2026-06-25; implementation plan announced 2026-06-18. On the dividend payment date (6/25), the stock abbreviation was prefixed with XD (company interactive reply).

4.8 Executive Change: Deputy General Manager Liu Xiaodong Resigns (Retirement at Age)

On 2026-07-31, China Satellite Communications received the resignation of Deputy General Manager Liu Xiaodong (retirement at age), disclosed on 2026-08-03 in the "Announcement on the Retirement and Departure of Senior Management" (2026-024). In October 2025, director Xu Wen resigned, and Lu Zheng was elected as employee representative director (disclosed in semi-annual report important matters).

4.9 Number of Shareholders: 292,077 as of 2026-06-30, Down 13.90% from Previous Period

As of 2026-06-30: China Satellite Communications A-share shareholder count 292,077, down 47,155 from the previous period (339,232 as of 2026-03-31), -13.90%. As of 2026-03-31: 339,232 (+35.74%); as of 2025-12-31: 249,905 (+49.50%). (East Money, announced 2026-08-25)

4.10 Top Ten Shareholders (as of 2026-06-30, Semi-Annual Report)

Top ten shareholders as of 2026-06-30: China Aerospace Science and Technology Corporation 62.77%; China Academy of Launch Vehicle Technology 4.77%; China Academy of Space Technology 4.77%; 24 CASC EB Guarantee and Trust Special Account 4.17%; newly entered/increased institutions: Guodiao Phase II Collaborative Development Fund Co., Ltd. 35,213,941 shares (0.83%), Guoxin Hongsheng Investment (Beijing) 18,535,049 shares (0.44%); multiple satellite industry index funds entered the top ten (Yongying Guozheng Commercial Satellite Communications Industry ETF 0.35%, Ping An CSI Satellite Industry Index 0.34%, Fullgoal CSI Satellite Industry ETF 0.30%, etc.).

4.11 ChinaSat-6B Satellite Decommissioning and Disposal Proposal Approved by Board of Directors

On 2026-06-30, China Satellite Communications' 31st meeting of the 3rd board of directors reviewed and approved the "Proposal on the Decommissioning and Disposal of the ChinaSat-6B Satellite" (announcement no. 2026-023, disclosed 2026-07-01); on the same day, the management's 2026 annual operating performance assessment indicators and the "Internal Control Management Regulations" were approved. The specific financial impact amount of the decommissioning on profit or loss was not obtained (need to check the announcement original text, marked as unverified).

4.12 Controlled Subsidiary APT Satellite Announces 2026 Interim Results Indicative Announcement

On 2026-08-21, China Satellite Communications issued the "Indicative Announcement on the 2026 Interim Results of Controlled Subsidiary APT Satellite Holdings Limited." APT Satellite International Limited is an important non-wholly-owned subsidiary (consolidated shareholding 42.86%, combined voting rights with the same control party 57.14%; 2026H1 revenue RMB 315 million, net profit RMB 67.21 million).

4.13 Business Developments: Launch of Satellite Mobile Data Business, First Three Contract Handsets

On 2026-08-21/23, China Satellite Communications launched its satellite mobile data business, with the first three contract handsets, contract handset packages priced from RMB 27,999. (Not an announcement, a recent business development.)

4.14 Software Copyrights: Multiple Software Copyrights Newly Registered in August 2026

On 2026-08-14, 08-27, 08-28, etc., China Satellite Communications newly registered multiple software copyrights (such as "Tianyuan Lingguan · Integrated Communication and Remote Sensing Application Simulation and Deduction System V1.0," etc.).

4.15 Related Party Transactions/Cash Management: Subscription of Up to RMB 3 Billion in Principal-Protected Cash Management Products; Annual Shareholders' Meeting Passed Related Party Transaction Proposals

On 2026-04-01, China Satellite Communications disclosed subscription of up to RMB 3 billion in principal-protected cash management products; on 2026-06-05, the annual shareholders' meeting passed proposals including the "2026 Annual Daily Operating Related Party Transactions" and the "Related Party Transaction Forecast with Aerospace Science and Technology Finance Co., Ltd. and Continued Execution of Financial Services Agreement."

4.16 Industry/Policy News (Highly Relevant to the Company, for Cross-Reference)

March 2026: The national 15th Five-Year Plan outline listed commercial aerospace as a strategic emerging industry; that year's "Government Work Report" proposed for the first time independently to accelerate satellite internet development (cited from the company's 2026 semi-annual report industry situation). August 2025: MIIT's "Guiding Opinions on Optimizing Business Access to Promote the Development of the Satellite Communications Industry," proposing more than 10 million satellite communications users by 2030. November 2025: China National Space Administration's "Action Plan for Promoting the High-Quality and Safe Development of Commercial Aerospace (2025-2027)." Sector event (2026-07-10): Long March 10B rocket successfully implemented first-stage controlled recovery/global first rocket net-based sea recovery, commercial aerospace sector surged in the afternoon, China Satellite Communications and China Satellite hit the daily limit up in the afternoon (Securities Times). 2026-09-08: Huawei Mate XT 2 debuted low-orbit broadband satellite function, satellite sector (China Satellite Communications, China Satellite) surged (Sina Finance news list).

4.17 Capital/Trading (Background, Not Announcements, Auxiliary Only)

Margin balance: RMB 1.762 billion on 2026-07-07 (1.43% of circulating market cap), declining to RMB 1.429 billion as of 2026-09-10 (1.39% of circulating market cap, -0.21% QoQ, ranked 14/120 in national defense and military industry). (Cailian Press Star Mine; stcn.com) Northbound capital: 2.1313 million shares held as of 2026-06-30 (0.05% of circulating), down 55.90% from the end of the previous quarter. Main capital: net outflow of RMB 192 million on 2026-07-20, etc. (East Money capital flow historical daily data). Note: FT page shows Jul 10 2026 RMB 32.88 +10.00%, which should be cross-verifiable with the July 10 sector limit-up; but the page is inconsistent with the domestic approximately RMB 24 in September, being a snapshot from a different date.

4.18 Uncertainty and Limitations Note

1) Time window: The latest company-level formal announcement retrieved is dated 2026-08-29; no new major announcements were found from September 1 to mid-September 2026 (there may be uncovered September announcements or Q3 earnings pre-announcements, requiring subsequent review of SSE announcement originals). 2) The 2026 semi-annual report is unaudited; the asset-liability ratio of 9.82% in the semi-annual report is on a management discussion basis. 3) Ma Haiquan as general manager comes from a single media statement by Economic Observer Network (2026-09-05); in the company announcement (2026-031 resolution of the first meeting of the 4th board of directors), only the election of Sun Jing as chairman was confirmed in the search excerpts; the general manager appointment should be based on the announcement original text, marked as single-source pending verification. 4) The financial impact amount of the ChinaSat-6B satellite decommissioning was not obtained (only the board's approval of the disposal proposal was confirmed). 5) Overseas data sources (FT/MarketScreener/Zonebourse/S&P Capital IQ) prices are inconsistent with domestic ones, all being historical snapshots; revenue/net profit figures cross-verify substantially consistently (2026H1 revenue RMB 1.229 billion, net profit attributable to parent RMB 113 million; full-year 2025 net profit attributable to parent approximately RMB 441 million), but individual bases (such as S&P 2025 revenue RMB 2.645 billion vs company approximately RMB 2.541 billion) differ, company announcement basis adopted. 6) The top ten shareholder list is based on 2026-06-30 (semi-annual report); the latest 2026-09-30 data was not obtained. 7) Leader identification verified correct: 601698 is indeed China Satellite Communications on the SSE Main Board, a different entity from peer China Satellite (600118), do not confuse.

5. Stock Price Trend and Technical Analysis

5.1 Price Overview

5.2 Technical Indicators

China Satellite Communications (601698) closed at RMB 24.16 on 2026-09-11, down slightly 0.54%, outperforming the Aerospace Equipment sector (-0.78%) and the Shanghai Composite Index (-1.18%) that day, and past 5 days +0.67% also stronger than both. However, on a medium-term basis, the stock price has cumulatively retraced approximately 55% from its 2026-01-12 high of RMB 53.85, down approximately 33% year-to-date, past 20 days -10.15%, past 60 days -22.88%, still in the downward digestion phase after the theme-driven rally. On the technical front, short-term moving averages (MA5/MA10/MA20 approximately 24.0~24.2) are highly converged, with the price entangled within them. MA50 (approximately 24.1), MA200 (approximately 25.9~26.4) still form overhead resistance, and the composite moving average signal leans "Sell"; MACD weakly converging near the zero line, RSI(14) approximately 37~42 leaning weak but not oversold. Baidu Stock's 09-11 short-term resistance of 24.35 and support of 24.02 basically overlap with the moving average cluster, indicating direction selection is not yet complete. Special note: MA/MACD/RSI readings are taken from pages dated 2026-08-28 and 2026-09-03 respectively, not 09-11 same-day snapshots; specific BOLL upper/middle/lower band values could not be obtained, all treated as missing data, no inference made. On the capital front, main capital had a net outflow that day (East Money basis -RMB 26.9764 million), coupled with low turnover of 0.43% and turnover of approximately RMB 441 million, short-term liquidity and order absorption capacity are weak.

5.3 Short-Term Outlook (Next Week, Scenario Analysis, for Reference Only)

⚠️ Risk Warning: The following content is only a short-term subjective scenario analysis based on existing price, technical indicators and capital flow data, and does not constitute investment advice. Do not use it for buying or selling operations.

① Key Technical Levels

② Next Week Scenarios (Subjective Weights, Not Statistical Probabilities)

• Range consolidation (relatively high weight, approximately 60% (subjective judgment, not statistical probability)): Price oscillates repeatedly within the narrow range of RMB 24.02~24.35, corresponding to Baidu Stock's resistance 24.35 and support 24.02; short-term moving averages continue to converge, MACD moves sideways near the zero line. Trigger conditions: volume maintains at the current normal range of approximately RMB 440 million turnover, no major directional changes in sector and market, no new news catalysts for the stock. This is the most natural scenario under the current technical pattern.
• Weaker downside (medium weight (subjective judgment, not statistical probability)): If it effectively breaks below the first support of RMB 24.02 (and further loses 23.71), the price may retreat toward the strong support range below RMB 23.3; corresponding to MACD weakening again, moving average system continuing bearish signals. Trigger conditions: market or aerospace equipment sector continues to adjust (09-11 sector -0.78%, Shanghai Composite -1.18%), or main capital continues the 09-11 net outflow trend (East Money basis -RMB 26.9764 million). If the strong support range (RMB 22.9~23.3) is also lost, the medium term would open space toward the 52-week low of approximately RMB 20.0.
• Rebound strengthening (relatively low weight (subjective judgment, not statistical probability)): If the price stands above the RMB 24.35 resistance with volume and further recovers 24.85 (08-28 MA50 reading), the short term could test the MA100/MA200 resistance band at RMB 25.3~26.4. Trigger conditions: significant turnover expansion, sector stabilizing and strengthening, or news catalysts (such as thematic events); RSI rebounding from the current weak range of 37~42. Note that MA100/MA200 are lagged readings, and their resistance effectiveness needs to be verified with the latest prices.

③ Capital and Liquidity Background

Liquidity and capital background: 2026-09-11 turnover rate 0.43% (SSE "total turnover rate" column 0.44%), turnover RMB 441 million, volume 183,700 lots, volume ratio 1.11, order ratio -5.44%—low turnover, moderate volume, limited order book absorption capacity. Capital flow varies across multiple sources, should be viewed side by side: East Money (09-11) shows main net inflow -RMB 26.9764 million (-6.11%), of which super-large orders +RMB 1.7723 million (+0.40%), large orders -RMB 28.7487 million (-6.51%), medium orders -RMB 5.8977 million (-1.34%), small orders +RMB 32.8741 million (+7.45%); Sina capital flow (09-11) shows total net inflow -RMB 10.245 million (-2.34%), main net inflow -RMB 8.5589 million (Sina "main" includes super-large orders plus some large orders). Recent representative readings: 09-10 main net buy RMB 17.2372 million, 09-03 main net sell RMB 20.9293 million, 09-07 main net sell RMB 14.4693 million (Securities Star). On shareholder structure: this research note does not provide top ten shareholder concentration, public fund/social security/QFII and other institutional holdings data, so no judgment can be made on institutional holding proportion or chip concentration, this data is missing; some overseas data pages involved in the research (Zonebourse, MarketScreener, FT) appear only as source clues, their specific values are not listed in the notes and should not be cited. In practical terms: low turnover combined with approximately RMB 440 million daily turnover means the stock's short-term order book is relatively thin, large buy/sell orders may bring noticeable slippage, and the impact of capital inflows/outflows on price will be amplified; and the stock's total share capital = circulating share capital (4.224 billion shares), with no additional chip disturbance from restricted share unlocks.

Volume confirmation signal: Using recent approximately RMB 440 million daily turnover as the normal baseline, if single-day turnover continues to expand to above RMB 600 million (accompanied by price standing above the RMB 24.35 resistance), this can be viewed as a signal of short-term capital entry, requiring further verification based on whether it can hold this level; conversely, if turnover continues below RMB 400 million and price breaks below the RMB 24.02 support, the weight of the weaker downside scenario increases.

④ Points of Attention (Observation Thoughts Only, Not Operational Instructions)

• Watch the breakout direction of the narrow range of RMB 24.02~24.35: standing above the RMB 24.35 resistance with volume and effectively breaking below the RMB 24.02 support correspond to the rebound strengthening and weaker downside scenarios respectively; these are observation thoughts, not operational instructions.
• Watch the strong support range of RMB 22.9~23.3: if this range is effectively broken below, the downside would target the 52-week low of approximately RMB 20.0, requiring reassessment of the medium-term technical pattern.
• Watch the volume confirmation signal: whether single-day turnover can continue to expand to above RMB 600 million (compared to the recent normal of approximately RMB 440 million) is a verifiable basis for judging whether capital is truly entering.
• Watch the multi-source basis and sustainability of main capital flow: 09-11 East Money basis main net outflow -RMB 26.9764 million, Sina basis -RMB 8.5589 million; also pay attention to whether subsequent disclosure data such as shareholder structure and institutional holdings appear (currently missing from the notes); the above are observation thoughts, not operational instructions.

The above scenario analysis is based on 2026-09-11 closing data and historical price and technical indicator calculations (of which MA/MACD/RSI readings are taken from 2026-08-28 and 2026-09-03, being lagged data; BOLL specific values missing). Short-term stock prices will also be disturbed by multiple factors such as news, capital, and market environment; technical indicators themselves have lag and limitations, do not constitute a guarantee of future actual trends, nor constitute buy/sell advice. Please make independent judgments based on the latest market information and bear investment risks yourself.

6. Industry Landscape and Competitor Analysis

6.1 Industry Status

The industry is communications satellite operation services (mainly GEO), with upstream being satellite manufacturing/launch/ground equipment, midstream being satellite communications operations, and downstream being radio and television, government, emergency, maritime, aviation, energy, M2M/IoT, etc. Market size (third-party basis, note single source/inconsistent bases): China satellite communications market size approximately RMB 89.6 billion in 2024 (Zhiyan Consulting/Hengzhou Chengsi); China satellite internet industry size approximately RMB 45.41 billion in 2025 (CCID Consulting, citing Zhiyan Consulting); global satellite communications market exceeded USD 200 billion in 2024 (Zhiyan Consulting). Global satellite internet is "China-US dominated," with SpaceX Starlink having cumulatively launched approximately 10,800 satellites and approximately 9,400 in orbit as of end-2025.

6.2 Competitive Landscape

• Competitive tiers (Qianzhan/Zhiyan Consulting, 2024-2025): First tier is China Satellite Communications, Haige Communications, Huali Chuangtong, APT Satellite, Sino Satellite and other large listed or state-owned satellite operation/transponder leasing/ground equipment companies; second tier is China Satellite and other satellite manufacturers, launch enterprises such as the launch vehicle academy, and license holders such as China Telecom and CITIC Digital Media; third tier is private enterprises such as Galaxy Space, Huaxun Fangzhou, China Netcom Satellite, Tianhai World holding single VSAT-type value-added service licenses
• Share basis note: Zhiyan Consulting states China Satellite Communications accounts for "80% of the domestic satellite communications operations market, Asia's second-largest, world's sixth-largest satellite communications operator"—this figure is from a single third-party source, with an early timing (around 2023), and could not be cross-verified with another authoritative source; citations must note source and limitations
• Low-orbit competition intensifying: China SatNet (GW constellation, planned 12,992 satellites, cumulatively launched over 150 as of 2026H1), Shanghai Yuanxin Satellite (Qianfan constellation, in-orbit satellites increased to 238 in 2026H1, has reached cooperation with Brazilian, Malaysian, Thai enterprises and Airbus) focus on low-latency broadband and direct-to-device/airborne connectivity, being one of the main sources of impact on China Satellite Communications' overseas/emerging businesses
• The three major telecom operators (China Telecom, China Mobile, China Unicom) have all obtained satellite mobile communications business operating qualifications, can conduct direct-to-device satellite business, possess massive C-end users and ground networks, and are potential diverters and co-opetitors in the "direct-to-device satellite" era
• International benchmarks include Viasat, Eutelsat/OneWeb, SES, Intelsat, and Hughes Network Systems (HNS), which filed for bankruptcy protection in 2026—viewed by the industry as a landmark event of GEO consumer broadband being "structurally displaced" by low-orbit

6.3 Main Competitors

Comparing China Satellite Communications with the most direct high-orbit benchmark APT Satellite, due to its domestic GEO license policy isolation layer and domestic revenue accounting for nearly 79%, its overall gross margin remained at 29.45% in 2025, while APT Satellite's comparable business gross margin was 27.3% with profit attributable to shareholders -31.1% and Southeast Asia revenue -20.3%, showing China Satellite Communications' domestic fundamentals have a thicker moat; but both are similarly impacted by Starlink and other low-orbit in overseas open businesses, with China Satellite Communications' overseas gross margin having collapsed to 0.16%. Compared with low-orbit national team/commercialization entities such as China SatNet (GW) and Shanghai Yuanxin (Qianfan), China Satellite Communications is a GEO high-orbit asset-heavy operator, facing substitution pressure from low-latency broadband and direct-to-device/airborne connectivity, with both sides forming "same-family co-opetition" on second curves such as low-orbit and direct-to-device. Compared with the three major operators, China Satellite Communications lacks massive C-end users and ground networks, but has exclusivity in its "national team" positioning in domestic satellite space segment resources and frequency/orbit resource rights; compared with China Satellite (600118), China Satellite Communications is its downstream operator/procurer, with procurement highly dependent on the CASC system (2025 group procurement accounting for 51.73%). Overall, China Satellite Communications' core contradiction is the coexistence of "domestic near-monopoly, low growth, low ROIC" and "overseas structural displacement by low-orbit," with the improvement path depending on domestic HTS product mix upgrade, overseas bleeding stop, and low-orbit/direct-to-device second curve realization.

7. Risk Warnings

• Continued rise in satellite depreciation eroding profits: 2026H1 net profit attributable to parent declined 37.36% year-on-year, with the company explicitly attributing the main reason to "increased satellite depreciation year-on-year." Fixed assets rose from RMB 9.499 billion at end-2023 to RMB 10.475 billion at end-2025, with construction in progress RMB 312 million; subsequent new satellite capitalization will continue to bring depreciation increments, while revenue/original value of fixed assets has fallen from 0.28 to 0.25. If revenue growth cannot match, the profit side will continue to come under pressure.
• Overseas business structurally displaced by low-orbit constellations: 2025 overseas revenue RMB 556 million (-10.64%), gross margin only 0.16% (year-on-year -12.32pct), the company's annual report states "strive to overcome the impact of Starlink on international business." Shanghai Yuanxin's Qianfan constellation has reached 238 in-orbit satellites and is expanding into Brazil, Malaysia, Thailand and other markets; China SatNet's GW constellation has cumulatively launched over 150 satellites; overseas open markets face continued substitution pressure, with gross margin reversal difficult.
• Rapid growth of accounts receivable and deteriorating collection quality: Accounts receivable book balance rose from RMB 420 million at end-2024 to RMB 656 million at end-2025, an increase of 56.05%, far exceeding the 4.08% revenue growth rate; accounts receivable/operating revenue rose from 16.54% to 24.80%, turnover ratio fell from 6.33x to 4.92x (-22.28%), which the company explains as "decreased collection of operating business receipts"; 2026H1 credit impairment losses increased year-on-year (accounts receivable bad debts). If downstream government and industry customers further lengthen payment cycles, impairment provision pressure will increase.
• Supplier highly concentrated in the controlling shareholder system: 2025 top five supplier procurement totaled RMB 1.380 billion, accounting for 75.27% of annual total procurement, of which controlling shareholder China Aerospace Science and Technology Corporation procurement was RMB 948.54 million, accounting for 51.73%. Satellite manufacturing and launch are highly dependent on the intra-group system, with strong cost rigidity and weak upstream bargaining power; if group supplier pricing or delivery pace changes, it will directly affect the company's capital expenditure and depreciation pace.
• Controlled subsidiary APT Satellite performance decline dragging: APT Satellite Holdings (Hong Kong-listed, consolidated shareholding 42.86%) issued a 2025 annual profit warning after market close on February 12, 2026, adversely affecting the parent company's performance. In 2025, APT Satellite's overall revenue was HKD 739 million (-5.8%), profit attributable to shareholders HKD 141 million (-31.1%), Southeast Asia revenue -20.3%; it has no domestic policy isolation layer, a high proportion of open market, more directly impacted by low-orbit, and the minority interests structure also causes differences in the company's PB basis (attributable to parent basis approximately 6.43x vs including minority interests basis approximately 5.10x).
• Valuation significantly higher than industry and mismatched with performance growth: As of September 11, 2026, PE(TTM) approximately 273.04x, static PE approximately 231.31x, dynamic PE (annualized based on 2026H1) approximately 451x, while the industry median P/E is only about 32.11x. The company's 2026H1 revenue growth was only 0.66%, net profit attributable to parent -37.36%, 2025 weighted ROE only 2.79%, ROIC approximately 1.86%; if the growth expectations implied by the high valuation cannot be realized, there is valuation regression pressure.
• Inconsistent satellite resource count disclosure bases: The company's satellite resources were 18 as of June 30, 2025, 19 as of December 31, 2025, and 18 as of June 30, 2026; the three figures are inconsistent (possibly due to launch/decommission and disclosure timing differences), and the ChinaSat-6B satellite decommissioning and disposal proposal was approved by the board on June 30, 2026, but the specific financial impact