Strategic partnership with Space Logistics Market Leader

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Laying a solid foundation for Business Growth

HONG KONG, Sept. 30, 2022 /PRNewswire/ — Hong Kong Aerospace Technology Group Limited (HKATG; 01725. HK) has recently been making waves with its corporate plans, its global profile has been growing since its inclusion as an eligible stock of the Shenzhen-Hong Kong Stock Connect, the issuance of ADRs, and the appointment of several world-class experts as the Company’s independent non-executive directors and executive directors.

The Group has recently announced that it has entered into a cooperation agreement with Haixing Guanglian Technology (Shenzhen) Co., Ltd, a company principally engaged in the Starlink benchmark and satellite laser communication technology. The two parties will cooperate in the development of commercial satellites, including carrying out in-depth cooperation in areas such as satellite payload carriage and application, recoverable satellite technologies, satellite development, and manufacturing to capture the 6G global communication interconnection market in the future. On 28 September, HKATG made another announcement, disclosing that a memorandum of understanding ("MOU") had been entered into with Italian space logistics leader, D-Orbit S.p.A. (”D-Orbit”) for cooperation in manufacturing and satellite technology, gaining business territory from the East to the West to capture the market share of low-orbit satellites industry which may reach US$308.3 billion.

Under the MOU, HKATG will provide satellite and payload launching services to D-Orbit, tentatively manufacturing 20 satellites per year and assisting D-Orbit in developing the Asia market, while D-Orbit will provide the Group with the D-Orbit cloud platform to assist in satellite launching and deployment services through its orbital transfer vehicle. The MOU is valid for one year and the strategic partnership will remain in place until either party gives written notice. In other words, for at least the next year, HKATG will achieve a stable positive cash flow, which is expected to drive revenue in the 2022/23 FY, creating a tailwind for investors.

Talent’s contribution becoming visible

Since July this year, HKATG has invited several world-renowned professionals to serve as independent non-executive directors and non-executive directors, including Dr. Mazlan Biniti Othman from Malaysia, Mr. Niu Aimin, Mr. Juan de Dalmau of German and Spanish descent, as well as establishing an international cooperation committee and an advisory committee to promote cooperation between the Group and international organizations in the commercial aerospace sector.

With the gathering of the world’s best and brightest in the sector, HKATG has made comprehensive progress in strategic consulting, technological innovation, and talent development. The company’s management believes that by leveraging D-Orbit’s experience and related space logistics technology and transportation solutions, the Group will be able to expand its international footprint, which will have a positive impact on its future development and the overall interests of its shareholders.

Business revenue vows to grow

Driven by the COVID-19, the global shipping and maritime industry has grown significantly over the past two years, but international logistics companies are aware that the robust growth won’t last forever, thereby, they are actively integrating networks in the air cargo, ground and sea transport to create a one-stop logistics package. AIRBUS, the European multinational aerospace corporation, and DHL, a global leader in logistics, are even dreaming of taking the logistics business to the skies, which drives the demand for low-orbit satellites. The Italian company D-Orbit, founded in 2011, is the first company in the world to address the logistics needs of the space market, developing, manufacturing, and operating the space vehicle ION satellite carrier, for which it owns the intellectual property rights. D-Orbit’s partners are among the leading companies mentioned above, and the said MOU will undoubtedly enhance the international image of the Hong Kong Space Technology Group.

With the emergence of satellite constellations, space logistics is an emerging niche market, and the transition of logistics giants into ‘space’, which involves identifying, designing, and developing solutions for space logistics activities, typically takes 10 to 15 years, meaning that D-Orbit and HKST Group are likely to become a cross-generational partnership that will boost the company’s revenues and prospects.

According to the report of Euroconsult that the space logistics market is expected to reach a market value of US$4.4 billion by 2031, driven by low-cost launches and growing demand for satellites. It is worth noting that space logistics is only one of the applications for LEO satellites, not to mention they are used to bridge connectivity gaps in smart city deployments and promote the mobile satellite communications markets; this strategic cooperation will undoubtedly have a positive effect on HKATG.