Goldman Sachs launches the Asia Space Economy Basket GSSZSPCE, favoring re-rating opportunities for Asia's supply chain amid global space economy expansion

Overview

This report introduces Goldman Sachs' Asia Space Economy Basket GSSZSPCE, focusing on the direct and supply-chain exposure of Asia-listed companies to global space economy expansion. The report argues that the space economy is in an active deployment phase, with sovereign constellations, LEO satellite connectivity, satellite manufacturing, launch and propulsion, ground equipment, space-grade materials, and orbital AI computing all widening the investable universe. Asia market companies play a backbone role in global construction through hardware manufacturing and supply chains, yet remain materially underweight in global thematic funds and indices, creating a mismatch between fundamentals and positioning.

Core views

The report's core view is that Asia space economy stocks offer attractive relative risk-reward. Supporting factors include: first, satellite launches and sovereign constellation build-outs create non-discretionary demand; second, Asia has key supply-chain positions in satellite manufacturing, launch, ground electronics, RF/GNSS, phased-array antennas, and space-grade materials; third, orbital AI computing and space data centers connect the space theme with AI infrastructure capex, extending the theme's duration; fourth, global space-themed fund AUM has risen sharply, but capital is still concentrated in US-listed companies, leaving Asia supply-chain names underowned; and fifth, Asia space economy stocks trade at a sizable valuation discount to global peers, while earnings momentum and revisions still provide support.

Analysis framework

The report builds the investment framework through a thematic basket approach, first assessing the global space economy market size, satellite deployment pace, and LEO satellite TAM; then breaking down mature revenue segments and early-stage growth segments within the value chain; and finally comparing the industrial roles, policy anchors, and commercialization stages of China, Japan, South Korea, Taiwan, India, and ASEAN/Singapore across different points in the value chain. It concludes by using the GSSZSPCE basket's constituents, industry classification, weights, historical performance, earnings revisions, and relative valuation to assess the investment opportunity.

Methodology notes

• Theme investing frameworkSpace Economy Value Chain

  Divide the space economy into core mature segments and early-stage growth segments

  Core positions should be anchored in launch, satellite manufacturing, ground equipment, and connectivity segments that have contracts, revenue, and high visibility; orbital AI computing, D2D, space pharmaceuticals, and microgravity manufacturing more clearly represent long-duration optionality.

• Basket construction methodAsia Space Economy Basket Selection Criteria

  Screen listed Asian stocks for companies with direct or supply-chain exposure to the space economy

  The stock pool requires six-month average daily turnover above US$5mn and is validated using RBICS sub-industry classification, supplier or customer relationships, disclosed contracts, product-level space component exposure, correlation with global space economy stocks, and thematic revenue exposure.

• Weighting methodBlended Free-Float Market Cap and 6M ADTV Weighting

  Weight by a blended metric of free-float market cap and six-month average daily trading volume

  Basket weights are capped at 5.0% per stock and floored at 0.5%, aiming to balance size, liquidity, and thematic representation.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• China space supply chain

  High exposure, covering the full-stack space economy chain from upstream to downstream.

  Strengths

  Has large-scale capabilities in satellite platforms, payloads, subsystems, rocket engines, ground electronics, and downstream data platforms, along with sovereign constellation deployment driven by ITU timelines.

  Weaknesses

  The report notes that China's earnings trend is weaker than Japan's and South Korea's, which may partly offset the basket's overall earnings momentum.

  Comparison

  Among Asia markets, China covers the most complete range of segments and stands out most for policy-driven scale and industrial capacity.

  Risks

  Pace of policy execution, commercialization returns, valuation volatility, and shifts in capital flow preferences.

• Japan space supply chain

  High exposure, focused on launch, propulsion, satellite platforms, and in-orbit sustainable services.

  Strengths

  Has high-reliability rocket propulsion, satellite systems integration, solar arrays, ground electronics, and commercial in-orbit service capabilities, supported by a JPY1tn Space Strategy Fund.

  Weaknesses

  Some projects still depend on government programs and launch cadence, so the pace of commercial expansion needs monitoring.

  Comparison

  Japan has a differentiated position in commercial debris removal and in-orbit services.

  Risks

  Launch schedule delays, project costs, policy funding rollout, and slower-than-expected commercial customer expansion.

• South Korea space supply chain

  High exposure, centered on launch systems, satellite manufacturing, and integrated space infrastructure.

  Strengths

  Rocket engines, KSLV-III, mass-production satellite facilities, SAR/EO satellite systems, and a group-integrated model support expansion.

  Weaknesses

  Commercial scale is still being formed, making it sensitive to contract wins and production ramp-up.

  Comparison

  South Korea is following a path between Japan and China that is more oriented toward commercial scaling and group integration.

  Risks

  Project milestone delays, export order volatility, capex pressure, and execution risk.

• Taiwan ground electronics and RF/GNSS supply chain

  Moderate to high exposure, mainly in ground electronics, RF/GNSS subsystems, and LEO hardware.

  Strengths

  Leverages strengths in semiconductors, PCBs, fiber-optic connectors, phased-array antennas, and precision electronics, with mature supply-chain relationships with global constellation operators.

  Weaknesses

  Its position in the value chain is more downstream, so thematic beta may be weaker than in launch and satellite manufacturing.

  Comparison

  Taiwan is an important supplier of ground electronics and connectivity hardware within Asia's space economy.

  Risks

  Weaker-than-expected end-demand ramp, customer concentration, semiconductor cycle swings, and geopolitical risk.

• India space economy

  Moderate exposure, still in the early stage of commercialization and scaling.

  Strengths

  Offers opportunities in government and private launches, satellite manufacturing expansion, NaviC/IRNSS navigation, EO analytics, and component manufacturing, supported by IN-SPACe and easing of FDI rules.

  Weaknesses

  The commercial ecosystem and listed asset maturity are still early, so revenue realization visibility remains limited.

  Comparison

  India is more of a growth option for the next 3–5 years than the most mature supply-chain exposure today.

  Risks

  Commercialization pace, regulatory execution, capital deployment, and project financing uncertainty.

• ASEAN and Singapore space economy

  Low to moderate exposure, mainly as a downstream demand market and regional hub.

  Strengths

  Singapore serves as a regional headquarters, financial, and industrial coordination hub, while ASEAN has demand potential in EO and LEO applications across agriculture, maritime, energy, climate, and connectivity.

  Weaknesses

  Current manufacturing and upstream hardware exposure is limited, with more emphasis on demand-side growth.

  Comparison

  Compared with China, Japan, South Korea, and Taiwan, ASEAN/Singapore is more focused on downstream applications and regional platforms.

  Risks

  Application rollout speed, customer willingness to pay, policy continuity, and infrastructure build-out progress.

Key data

• Global space economy sizeUS$429bn in 2025SIA annual report estimate, up about 3% year over year in 2025.
• Commercial satellite value-chain revenueUS$303bn in 2025Includes commercial revenue related to the satellite industry chain.
• Satellite launches in 20254,434 satellitesUp about 65% year over year, with total operating satellites reaching 14,266.
• Target additional satellites over the next five years~70,000 satellitesSupports demand for launch, manufacturing, ground equipment, and connectivity hardware.
• LEO satellite market forecastUS$108bn by 2035Goldman Sachs technology stock analysts expect about 7x expansion from US$15bn in 2024, implying a 2024–35E CAGR of about 20%.
• Global space-themed fund AUM~US$25bn peak across 40+ productsAbout US$1bn at the start of 2025, showing rapid thematic fund expansion.
• GSSZSPCE constituent count53 constituentsThe four business categories are launch and propulsion, satellite manufacturing and components, ground segment and downstream applications, and space-grade materials and electronics.
• Business classification weights16% / 40% / 26% / 18%Corresponding to launch and propulsion, satellite manufacturing and components, ground segment and downstream applications, and space-grade materials and electronics.
• Relative valuation discountP/E -60%, P/B -25%The report says Asia space economy stocks trade at a significant discount to global peers, with relative valuations near historical low end of range.

Impact & implications

The investment implication is that Asia's space economy supply chain could become a non-US beneficiary of the global satellite deployment cycle. Compared with purely conceptual space assets, the report emphasizes hardware supply-chain companies with orders, capacity, policy support, and visible earnings realization. In the short term, satellite manufacturing and components may perform best because order visibility is high; ground segment and downstream applications currently lag and may need end-demand volume and earnings realization to trigger re-rating; over the medium to long term, sovereign project execution, AI infrastructure convergence, and increased institutional participation may continue to support investment interest across the space economy value chain.

Risks

• Global space-themed fund flows may continue to concentrate in US-listed companies, and the timing of any recovery in Asia supply-chain underweight positions remains uncertain.
• If satellite deployments, sovereign constellation programs, launch schedules, or government budgets are delayed, order flow and revenue realization could weaken.
• Some early-stage growth themes such as orbital AI computing, D2D, space pharmaceuticals, and microgravity manufacturing remain commercially early, so valuations may move ahead of revenue realization.
• Although Asia supply-chain names trade at valuation discounts to global peers, the discount may persist if earnings revisions slow or risk appetite weakens.
• Geopolitics, export controls, spectrum and orbital resource regulation, launch safety, and supply-chain localization policies may affect cross-border customer relationships.
• The basket's tradability depends on market conditions, including liquidity, stock-borrow constraints, and the tradability of individual names.

What to watch

• The actual launch pace and order conversion for the roughly 70,000-satellite target over the next five years.
• The pace of execution of space policy funding in Japan, South Korea, India, Singapore, and China.
• Commercial revenue realization in LEO satellite connectivity, maritime and aviation broadband, D2D, ground terminals, and EO data services.
• Whether orbital AI computing and space data centers begin real procurement and generate hardware orders in 2026.
• Whether global space-themed ETF and fund flows spread from US-listed companies to Asia supply-chain names.
• The relative performance and earnings revision trends of the four subsegments in GSSZSPCE—satellite manufacturing and components, launch and propulsion, ground segment, and space-grade materials and electronics.
• Whether P/E and P/B discounts for Asian stocks versus global space economy peers narrow.