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Huatong: SpaceX IPO a 'Sell the News' Event

From Liberty Times · () Chinese

Translated from Chinese, summarized and contextualized by DistantNews.

At a glance

News Named sources Context piece
  • SpaceX's successful IPO saw its stock surge 19.2% on its first day, reaching a market value over $2.1 trillion.
  • Despite SpaceX's strong performance, related low-orbit satellite stocks, including dominant space board supplier Huatong, experienced a downturn.
  • Huatong's stock fell 0.76% as investors appeared to sell on the news, though the company is expected to benefit from new satellite clients and upgraded PCB specifications for future satellites.

SpaceX's highly anticipated stock market debut saw a significant 19.2% increase on its first day of trading, pushing its market capitalization beyond $2.1 trillion. The company's successful listing generated substantial trading volume, reaching $83.7 billion.

SpaceX listed on the US stock market last Friday, with a first-day increase of 19.2%, transaction volume reaching $83.7 billion, and market value exceeding $2.1 trillion.

— Liberty TimesReporting on SpaceX's IPO performance.

However, the positive momentum for SpaceX did not translate to its related industry stocks. Low-orbit satellite concept stocks experienced a sell-off, with Huatong (2313), a leading supplier of space boards, seeing its share price drop. After opening higher, Huatong's stock fell 0.76% by mid-morning, trading at 261 yuan, with significant intraday volatility.

Huatong, which holds a dominant 90% market share for SpaceX's space boards and supplies nearly all space PCBs, had seen its stock price rise in anticipation of the IPO. The company has also secured a second low-orbit satellite client. Analysts had projected strong revenue growth for Huatong in the current year, driven by new clients and expanded production capacity. Furthermore, upcoming satellite generations are expected to feature significantly enhanced specifications and larger PCB sizes, promising further revenue and profit growth for Huatong.

However, low-orbit satellite concept stocks were sold off today, with stock prices falling against the trend.

— Liberty TimesDescribing the market reaction to related stocks after SpaceX's IPO.

Beyond its dominance in the low-orbit satellite market, Huatong maintains a leading position in high-end mSAP substrate manufacturing. The increasing demand for faster data transmission in AI servers is driving a rapid upgrade of optical modules in data centers from 400G to 800G and even 1.6T. The PCBs used in these advanced optical modules are now predominantly mSAP boards. With the widespread adoption of 800G expected in the latter half of the year, market analysts anticipate potential supply shortages for mSAP boards. Huatong's advanced manufacturing capabilities and production capacity in mSAP position it to capitalize on this trend and emerge as a frontrunner in the supply chain.

Huatong is the overlord of space boards. Its market share in SpaceX's space boards is as high as 90%.

— Liberty TimesHighlighting Huatong's dominant position in the space board market.
DistantNews Editorial

Originally published by Liberty Times in Chinese. Translated, summarized, and contextualized by our editorial team with added local perspective. Read our editorial standards.

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