Space companies are at the forefront of innovation, opening up tons of possibilities with applications that can revolutionize different industries.
Have you watched movies about space that stir your imagination about outer space, astronauts, rockets, satellites and more?
Do you want to have the opportunity to be part of the exciting developments in space?
Read on until the end of this article, because you stand a chance to be part of the early crowd to obtain ownership in a space company.
If you have heard of Elon Musk (CEO of Tesla), you probably also heard of SpaceX – his other company in the space industry.
SpaceX’s business is in the design, manufacturing and launching of rockets and spacecraft. Its mission is to build launch vehicles that are capable of transporting humans to various destinations within the solar system, including Mars.
Space X is worth US$180 billion as of Dec 2023.
Its valuation used to be $36 billion in March 2020.
That amounts to a 5x return (ie. 500%) within 3+ years.
At this stage, you cannot invest in SpaceX as the company is still private and it accepts investments exclusively from PE/VC firms and selected high-net-worth individuals.
Another space company, GE Aerospace, went public on 4 April 2024.
GE Aerospace focuses more on aircraft and defense engineering.
It recorded a 1-year return of 103%. As of the date of this article, its stock price is still on an uptrend with analyst ratings being highly positive on the company’s outlook.
These examples show that the space industry is much welcomed by investors, which see the potential for further innovation and growth in the interstellar realm.
Growth Potential of Space industry
Research from the Space Foundation shows that the global space industry has expanded by 70% to $424 billion in value from 2010 to 2020.
Looking forward, the space industry possesses significant growth potential with ample room for innovative breakthroughs and new developments that benefit society.
According to Citi analysts, the space industry is projected to grow to $1 trillion in annual revenue by 2040.
Mckinsey & Co. and World Economic Forum researchers have a more optimistic projection, with an estimation that the global space economy could grow from around $630 billion in 2023 to $1.8 trillion by 2035.
The majority of growth is expected to arise from areas related to satellite manufacturing, launch services, ground equipment and satellite-based applications.
Currently, the satellite market accounts for the greatest share of the space economy at over 70%.
The majority of satellite revenues has traditionally been attributed to television and broadcasting services. However, an increased in global network connectivity is expected to contribute to growth in mobile communication, broadband services, internet-of-things networks and more. The satellite imagery segment is also expected to exhibit strong growth.
Additionally, Citi expects “space-as-a-service” applications to $17 billion in annual sales by 2040.
Another factor that has accelerated the growth progress of the space industry is the decline in space exploration costs which open up opportunities for further expansion within the industry.
Technology advancements have successfully reduced rocket launching costs significantly, with current levels being about 40 times lower since the 1980s.
Satellites have also become more lightweight, reducing the overall capital investment required by space companies.
This encourages more private companies to play a role in space development, a huge change from the past when the industry was once dominated by government-related companies that prioritize national interests more than efficiency and innovation.
In recent years, the space industry has seen an unprecedented surge in interest and investment from private investors, with space infrastructure companies receiving $14.5 billion of private investment, according to Space Capital’s quarterly report.
Which areas can you invest in within Space?
Opportunities abound in the diverse space industry.
From satellite launches and deployment to space station manufacturing to asteroid mining and space tourism, the possibilities seem limitless.
Here are some key areas driving investor interest:
Satellite Technology: The proliferation of satellites for communication, earth observation, and navigation has opened up a wide range of commercial opportunities. Companies like SpaceX, OneWeb, and Planet Labs provide services ranging from broadband internet to high-resolution imagery.
Resource Exploration and Mining: The exploration and exploitation of resources in space, including minerals and water on the Moon or asteroids, present lucrative opportunities. Companies such as Planetary Resources and Deep Space Industries are working towards tapping into these extraterrestrial resources.
Navigation & Positioning: Global navigation satellite systems (GNSS), such as GPS, GLONASS, and Galileo, have become indispensable tools for precise positioning, navigation, and timing. Companies like Trimble and Garmin integrate GNSS technology into products for agriculture, construction, transportation, and outdoor recreation, enhancing efficiency, safety, and convenience. Emerging applications, such as autonomous vehicles and drone delivery, rely on satellite navigation to enable seamless operation and accurate localization.
Launch Services: The increasing demand for launching satellites, scientific missions, and even space tourists into orbit has created a burgeoning market for launch services. Companies like SpaceX, Rocket Lab, and Arianespace are cornerstones of this sector, offering reliable and cost-effective launch solutions.
Space Tourism: With companies like SpaceX, Blue Origin, and Virgin Galactic making strides in commercial space travel, space tourism is no longer confined to science fiction. As the cost of access to space decreases and technology advances, this market could see significant growth in the coming years.
Space Infrastructure: As humanity expands its presence beyond Earth, the need for infrastructure such as space habitats, refueling stations, and lunar bases will grow. Companies focusing on developing such infrastructure stand to benefit from this long-term trend.
Data Services: The proliferation of satellites has unlocked a wealth of data that fuels innovation and drives economic growth. Companies like Descartes Labs and Orbital Insight specialize in processing and analyzing satellite imagery, offering insights into global trends, market dynamics, and supply chain optimization. This data is invaluable for businesses, governments, and research institutions seeking to understand and respond to complex challenges, from urbanization to climate change.
How to Invest in Space Companies?
There are several publicly-listed space startups that you can invest in through a brokerage platform.
Rocket Lab (RKLB) specializes in launch services, satellite manufacturing, and software used on spacecraft. It successfully launched its first rocket in 2018 and completed more than 20 flights in its history. The company has planned missions for trips to Mars and Venus as well.
Rocket Lab has close collaborations with US government agencies such as NASA, the Defense Advanced Research Projects Agency (DARPA), and the U.S. Space Force.
It is one of the investments within Cathie’s Wood’s ARK funds (which manage a total of $60 billion in assets across innovative companies).
Other high-profile space companies include Virgin Galactic Holdings which focuses on space tourism (founded by Richard Branson), and Blue Origin which focuses on aerospace manufacturing and launch services (funded by Amazon’s founder Jeff Bezos).
You can also invest in space-related exchange-traded funds (ETFs) such as the ARK Space Exploration & Innovation ETF (ARKX; expense ratio: 0.75%), iShares U.S. Aerospace & Defense ETF (ITA; expense ratio: 0.40%) or SPDR S&P Aerospace & Defense ETF (XAR; expense ratio: 0.35%).
ITA’s investments is not purely focused on space companies, as it includes shareholdings in defense companies such as RTX Corp. (RTX), as well as aerospace manufacturers such as Boeing Co. (BA), Howmet Aerospace Inc. (HWM) and Lockheed Martin Corp. (LMT). Investments in such large-cap stocks offer more stability, however any potential upside may be limited in comparison.
ITA is weighted in terms of market capitalization, which means that larger companies have greater weights. For example, the 3 largest stocks within the ETF (RTX, Boeing and Lockheed Martin) collectively account for 45% of the ETF (which own a total of 38 stocks).
Compared to ITA, all the stocks within its XAR are assigned equal weights no matter their size. This provides greater diversification benefits as it reduces the individual % exposure to a single stock.
There are also many private space companies that have yet to gone public.
The most popular one is Space X which was founded by Elon Musk, commanding a $180 billion valuation as of 30 Dec 2023.
Another private company is what I am excited to share with you today in this article – AX in short.
Discover the Future of Satellite Technology:
Investment in AX
Imagine being one of the early investors having a stake in a venture that’s revolutionizing communication, navigation, and observation globally.
The demand for satellite services is soaring, with an ever-expanding array of applications in telecommunications, agriculture, climate monitoring, and more.
However, AX’s mission is not just building satellites – it is to build bridges to connect the world, empower businesses, and drive progress.
🚀 AX’s business & technology expertise
– AX develops low Earth orbit (LEO) satellites that have the potential to spearhead the future of connectivity and data transmission.
– Its business offerings encompass several areas including:
i) Automatic Identification Services
ii) Internet-of-Things
iii) Earth Observation services
iv) Internet connectivity & EDGE Cloud Computing services
– These services drive insights & enhances decision-making across various industries, with commercial applications in: agriculture, forestry, mining, urban planning, disaster response, construction, marine transportation, autonomous vehicles, drone delivery and more.
– AX has a strong project pipeline with multiple strategic partnerships (including ASEAN governments & multinational companies).
🚀 What sets it apart?
– AX possesses a first mover advantage in the LEO satellite operator space in Southeast Asia – an untapped blue ocean.
– AX’s proprietary technology and strategic partnerships enable it to deliver unparalleled performance that can open up diverse revenue streams.
– AX successfully obtained approval from Malaysian Communications and Multimedia Commission (MCMC) and membership to International Telecommunication Union (ITU) within 1 year of its operations. This normally takes between 9 months to 24 months for typical companies.
– The high industry standards, regulatory requirements and significant capital outlay provide a strong barrier to entry that protects AX from competition.
– AX’s Technology department includes experienced key engineers that form part of the working team of Astronautic Technology Sdn Bhd (ATSB) which designed & launched the RazakSAT Satellite on 14 July 2009 .
RazakSAT was the only operational satellite to be put into orbit by SpaceX’s Falcon 1 rocket.
It was Malaysia’s 2nd satellite and the world’s first LEO remote sensing satellite to be launched into near equatorial orbit.
🚀 Investment Opportunity:
– After successfully launching its first LEO satellite into space on 27th June 2023, AX is raising a pre-IPO funding round to finance its expansion.
– AX targets for an IPO on US Nasdaq in Q3 2024 (Status: F-1 Effectiveness – indicating high likelihood of IPO)
– Current investment is priced at a steep 50% discount to IPO price (i.e. potential upside of atleast 100% upon IPO for early investors).
🚀 Join us in shaping the next frontier of communication, navigation, and observation.
By investing in AX, you’re not only tapping into a lucrative market with immense growth potential but also contributing to the advancement of technology and the betterment of society. It is an investment in the future of technology, of connectivity, and of possibility.
Interested to find out more?
⬇️ Let us know by clicking the image below to register, and we will schedule an in-depth discussion with you
Conclusion
SpaceX’s impressive valuation of $180 billion (alongside its rapid valuation growth) coupled with the rising number of players entering the space industry indicates that there is still considerable upside potential for companies in the space industry.
While the industry is still nascent, it offers tremendous growth potential as technological progress improves. This opens up significant investment opportunities for savvy investors that are willing to navigate the risks and uncertainties of the final frontier.
By carefully evaluating the technological, market, and financial factors affecting space ventures, investors can position themselves to profit from the growing commercialization of space.
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