According to a commercial space market research report published by Future Market Insights, Inc., the global small satellite market is expected to thrive at a strong CAGR of 15.3%. By 2033, the market size will exceed 55.9 billion US dollars. Among them, emerging economies such as India and China are growing the fastest, but the space ambitions of the powerful Middle East countries should not be underestimated.

Of these, the Kingdom of Saudi Arabia is undoubtedly the most positive one. From starting the space flight program to train astronauts to advance the implementation of the “Saudi Vision 2030,” everything shows Saudi Arabia's determination to assist the country's space development by actively participating in space-related scientific experiments and international research to accelerate economic diversification.

In this context, enterprises and organizations that can successfully become Saudi cooperative allies and whose cooperative work can be included in the priority areas of government projects are expected to usher in new business breakthroughs in the process of helping Saudi Arabia realize its “space dream.”

Intercontinental Aerospace Science and Technology join hands with Masarrah Investment to “go both ways” with Saudi Arabia

On February 2, Intercontinental Aerospace Technology (1725.HK), the first listed commercial satellite company in Hong Kong, announced that on February 1, 2024, Aspace Saudi, Aspace HK and investors entered into a joint venture agreement with Aspace Saudi.

According to the terms of the joint venture agreement, the shareholding ratio of Aspace HK and investors in Aspace Saudi will be maintained at 85:15, subject to certain conditions to be fulfilled by the investors and Aspace HK. Investors are expected to assist Aspace Saudi in the construction of its satellite manufacturing facility and future business operations in the Kingdom of Saudi Arabia.

As soon as the announcement was issued, it quickly attracted keen attention from the market. From the perspective of the capital market, the company's stock price once surged nearly 10% in early trading on the same day.

In the author's opinion, the main reason why this collaboration has become a focus is that the background of the current investor, Masarrah Investment Company, is worth checking out.

According to reports, Masarrah Investment Company is the parent company and family office of Almutlaq Group (AMG). AMG was founded by Abdulmohsen and Mutlaq Almutlaq in 1954. After nearly 70 years of development, AMG has developed into a strong diversified investment institution through the accumulation of multiple businesses and maintaining the correct strategic development direction.

Currently, AMG has become an integral part of Saudi Arabia's economic development. The company not only invests in and operates local companies in the fields of retail, energy and petrochemicals, industrial manufacturing, agriculture and products, and real estate, but has also recently participated in the Saudi government's privatization projects through acquisitions and green space development projects, making important contributions to Saudi economic development in many ways. Therefore, Masarrah Investment Company's investment behavior this time is not only a simple act of capital; as an investment company that is deeply involved in Saudi Arabia's economic development, it also reflects the will of the Saudi government behind it.

As mentioned above, the space sector has always been the focus of the Saudi government.

According to information, since Saudi Arabia launched its space program in 2018, it has been investing real money. In recent years, the Saudi government has continued to develop the domestic space industry through cooperation with the United States, China, Russia, Germany, France and other countries. In recent years, they have also clearly turned their attention to China, and capital has continued to pour into leading companies in the domestic market. In November of last year, Saudi Arabia and ASPACE, a satellite technology company under the Intercontinental Aerospace Science and Technology Group Co., Ltd., reached an agreement worth about 267 million US dollars to build Saudi Arabia's first satellite manufacturing plant.

According to the author, Masarrah Investment Company signed a joint venture agreement with Intercontinental Aerospace Science and Technology. To put it mildly, it is due to recognition of the advantages of intercontinental aerospace technology in the space field. In the future, it is optimistic about the development of China's aerospace science and technology.

Intercontinental Aerospace Science and Technology: Further deepening of the Middle East layout is expected to accelerate development

Under such background support, the driving force for the development of the intercontinental aerospace science and technology business and the company's development is also basically imaginable.

Through Aspace Saudi, it is possible to reduce the cost of the company entering the region to a certain extent, make it more convenient for Intercontinental Aerospace Technology to develop its business in the Saudi region, and provide a guarantee for the company's subsequent development. It is expected to build a moat for the company and continuously enhance the company's core competitiveness.

As explained in this announcement, the joint venture established by the two parties can introduce satellite manufacturing into Saudi Arabia, and the company's related business has been identified as a priority area under the “Saudi Vision 2030” project.

Looking at it from another perspective, Intercontinental Aerospace Science and Technology was able to successfully cooperate with Masarrah Investment Company, which shows that the company's advantages in the space field have been affirmed. With the approval of the Saudi government and the endorsement of the Saudi government, it can bring impetus to the company's business development, while further consolidating the company's position and popularity on a global scale through the Saudi government's influence, thereby attracting cooperation from more countries trying to develop the space industry.

We can see that the virtuous cycle built by intercontinental aerospace science and technology through the positive flywheel effect has begun. In the future, overseas cooperation projects will only be promoted faster and faster, and the company can continue to obtain more market share and resources from this to achieve continuous development.

All in all, the company's continuous exploration of the world helps enhance its own value, deepens the layout of the moat, and combines the strengthening of value brought about by cooperation, laying an incremental foundation for the long-term development of intercontinental aerospace science and technology, enabling the company to continue to realize its growth potential and value. With the promotion of more cooperation between the company, it is expected that Intercontinental Aerospace Science and Technology will use the momentum to accelerate the pace of development and achieve the company's significant development.