In-Depth Analysis of LandSpace's Reliance on Government Subsidies

Based on the latest public information and prospectus data, LandSpace Technologies Corp. (hereinafter referred to as “LandSpace”) exhibits typical characteristics of Chinese commercial aerospace enterprises in terms of reliance on government subsidies. The following is a systematic analysis from multiple dimensions:

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According to the prospectus disclosure, the amounts of government subsidies recognized in profit or loss by LandSpace from 2022 to the first half of 2025 are as follows[0]:

Period	Government Subsidy Amount (RMB ten thousand)	Proportion of Net Profit
2022	1,910.60	~2.3%
2023	2,075.27	~1.7%
2024	2,985.45	~3.4%
H1 2025	878.27	~1.5%
Total	7,849.59	-

• The amount of direct government subsidies is relatively limited, totaling only approximately RMB78.5 million (7,850 ten thousand yuan) over four years
• The proportion of government subsidies to net profit losses is extremely low, ranging from 1.5% to 3.4%
• From the perspective of direct subsidies, LandSpace
  is not highly reliant on government financial subsidies
  [0]

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Despite limited direct government subsidies, LandSpace has obtained substantial

through the following channels:

• National Manufacturing Transformation Fund
  : In December 2024, LandSpace received an investment of RMB900 million from the National Manufacturing Transformation Fund, which focuses on advanced manufacturing[1]
• China Small and Medium Enterprises Development Fund
  : Participated in early-stage investment
• Local Industrial Funds
  : Funds with local government backgrounds such as Qingdao Haijin and Wuxi Chifa participated in investments[0]

• Institutions such as Sequoia China and AVIC Trust have government guidance fund backgrounds
• Cumulative public financing scale exceeds RMB3.5 billion[0]

• R&D Subsidy Policy
  : The 2024 Special Support Plan for Commercial Aerospace Technology Innovation provides R&D subsidies (up to RMB100 million per project)[2]
• Central-Local Collaborative Policy
  : Multiple regions including Beijing, Shanghai, Guangdong, Zhejiang, and Jiangsu have introduced special support policies
• Government Procurement Support
  : Expand the scope of government procurement of commercial aerospace products and services

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From an industry perspective, Chinese commercial aerospace enterprises generally exhibit the characteristic of “policy-driven + capital-intensive”[2]:

1. Continuous Policy Intensification
   :
   • Commercial aerospace has been included in the Government Work Report for two consecutive years
   • The scale of China’s commercial aerospace market is expected to reach RMB2.3 trillion in 2024, with a compound annual growth rate of 22.5% from 2015 to 2024[0]
   • Local governments have established industrial funds (e.g., Hunan established a RMB3 billion aerospace industrial fund)

2. Capital Market Enthusiasm
   :
   • In 2024, there were 138 financing events for Chinese commercial aerospace enterprises, with a total financing amount of RMB20.239 billion[2]
   • The number of unicorn enterprises in the industry reaches 12
   • Shanghai Yuanxin Satellite completed a RMB6.7 billion Series A financing in February 2024, setting an industry record

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Indicator	2022 (RMB ten thousand)	2023 (RMB ten thousand)	2024 (RMB ten thousand)	H1 2025 (RMB ten thousand)
Operating Revenue	78.29	395.21	427.83	3,643.19
Net Profit	-80,400	-118,800	-87,600	-59,700
R&D Expenses	48,700	83,000	61,300	35,900
Cumulative Losses	346,500 (2022 - H1 2025)

From the financial data, LandSpace

:

• R&D Investment Intensity
  : Cumulative R&D expenses amount to RMB2.289 billion, which is 46.7 times the operating revenue (approximately RMB49 million) during the same period[0]
• Proportion of Direct Government Subsidies
  : RMB78.5 million accounts for only 2.27% of cumulative losses
• Financing Reliance
  : Cumulative financing exceeds RMB3.5 billion, approximately 1.01 times the cumulative losses

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Enterprise	Government Subsidy Status	Financing Status
LandSpace	Approximately 7,850 (RMB ten thousand) in direct subsidies over four years	Cumulative over RMB3.5 billion
i-Space	Similar policy support environment	RMB700 million in Series C financing in 2024
OneSpace	Similar policy support environment	Cumulative financing of billions of yuan through multiple rounds

• Commercial aerospace enterprises generally obtain development funds through
  equity financing
• The proportion of direct government subsidies is generally low
• Mainly rely on support from
  industrial policies, state-owned capital, and capital markets

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LandSpace’s VAM agreements signed with early investors include clauses on listing timeline and performance commitments. If it fails to complete a qualified IPO as scheduled, the actual controller may face pressure to repurchase shares[0]

In the first half of 2025, the company’s sales revenue from a single Customer D reached 3,569.33 (RMB ten thousand), accounting for 97.97% of total revenue[0]

As of June 30, 2025, the company’s consolidated statement shows undistributed profit of -RMB4.84 billion[0]

Net cash flow from operating activities has remained negative, with a cumulative net outflow of approximately RMB3.302 billion[0]

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, and its characteristics are as follows:

1. Limited Direct Subsidies
   : Cumulative government subsidies over four years amount to approximately RMB78.5 million, accounting for only 2.27% of cumulative losses

2. Significant Indirect Support
   : Obtained substantial indirect support through channels such as equity investment from state-owned capital, industrial funds, and government guidance funds

3. Capital-Driven Characteristic
   : Mainly relies on equity financing (over RMB3.5 billion cumulative) to support R&D and operations

4. Industry Commonality
   : Chinese commercial aerospace enterprises generally adopt a “policy support + capital-intensive” model, where direct government subsidies are not the main source of funding

: LandSpace’s development model is closer to “market-oriented financing under policy support” rather than the traditional “government subsidy-dependent” model. Its ability to achieve break-even depends on the maturity of reusable rocket technology and the improvement of commercial launch capabilities.

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[0] Huxiu - “Star Commercial Aerospace Enterprise Faces IPO On-Site Inspection with RMB3.4 Billion Cumulative Losses, Adding Uncertainty to LandSpace’s IPO Journey” (https://m.huxiu.com/article/4823995.html)

[1] Reuters - “China’s LandSpace launches improved methane-powered rocket” (https://www.reuters.com/science/chinas-landspace-launches-improved-methane-powered-rocket-2025-05-17/)

[2] People’s Daily - “Prospects, Trends and Promotional Measures of China’s Commercial Aerospace” (http://paper.people.com.cn/rmlt/pc/content/202507/01/content_30087745.html)

[3] Gelonghui - “LandSpace Applies for STAR Market Listing, Engages in Rocket Launch Services, with Cumulative Losses Exceeding RMB3.5 Billion in Three and a Half Years” (https://www.aastocks.com/tc/stocks/news/glh-news/GLH5145014N/1)