Investment Value Analysis of Blue Arrow Aerospace's STAR Market IPO: Research on the Commercialization Prospects of the World's First Liquid Oxygen Methane Rocket

Based on the latest collected information, I will provide a detailed analysis of how Blue Arrow Aerospace can convince STAR Market investors.

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China’s commercial aerospace is at a dual inflection point of ‘technological breakthrough’ and ‘scale explosion’[1]. According to data from iiMedia Research and Taibo Think Tank, the scale of China’s commercial aerospace market is expected to exceed

in 2024, with a compound annual growth rate maintaining above [2]. The total global space economy is approximately USD 400 billion, of which commercial aerospace revenue accounts for as high as , establishing a business-led pattern[2].

In November 2025, the Commercial Aerospace Department was officially established, which is the country’s first full-time regulatory department for commercial aerospace[1]. In the same month, the China National Space Administration issued the Action Plan for Promoting the High-Quality and Safe Development of Commercial Aerospace (2025-2027)[1]. On December 26, the Shanghai Stock Exchange released Guideline No. 9 for the Application of Issuance and Listing Review Rules – Application of the Fifth Set of STAR Market Listing Standards to Commercial Rocket Enterprises, which for the first time clearly pointed out the path for commercial rocket enterprises to pursue listing on the STAR Market[3].

In December 2025, China submitted a deployment plan for

in constellations to the International Telecommunication Union (ITU), covering about 14 constellations, setting a historical record[4]. These include China SatNet’s “GW Constellation” (about 13,000 satellites) and Yuanxin Satellite’s “Qianfan Constellation” (about 15,000 satellites). These large-scale satellite internet programs will generate massive demand for rocket launches[4].

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The self-developed “Tianque” liquid oxygen methane engine of Blue Arrow Aerospace is its core competitiveness[5]. Compared with traditional propellants, liquid oxygen methane has the following unparalleled commercial advantages:

Technical Route	Advantages	Disadvantages
Liquid Oxygen Methane	Low cost, easy maintenance, high reusability potential, clean and no carbon deposition	High technical threshold
Liquid Oxygen Kerosene	Mature technology	Severe coking during combustion, high reuse cost
Liquid Oxygen Liquid Hydrogen	Highest specific impulse	Low density, large storage tank, extremely high cost

Liquid oxygen methane burns cleanly, producing almost no carbon deposition, which greatly simplifies the engine reuse process and reduces turnaround time and maintenance costs[5]. This is also the reason why SpaceX’s Starship chose this route.

:

• Successfully launched in December 2023, becoming the
  world’s first liquid oxygen methane rocket
• Has completed four flight missions with a 100% success rate
• Carried multiple commercial satellites including those from Spacety Research Institute into orbit[5]
• Has signed formal launch service contracts with China SatNet and Yuanxin Satellite[6]

:

• Completed its first flight in December 2025, with the second stage successfully entering orbit
• The first stage completed supersonic re-entry verification, with control capabilities reaching world-class levels[5]
• Adopts a high-strength
  stainless steel rocket body
  same as Starship, with extremely low raw material costs
• Designed for a first-stage reuse count of no less than
  20 times
  [5]

Blue Arrow Aerospace has formed a complete independent R&D capability for liquid oxygen methane engines:

• TQ-12 (80-ton class)
  : Main engine, adopting gas generator cycle
• TQ-15 (Vacuum Version)
  : Optimized for vacuum environment to improve specific impulse performance
• Relying on a self-built hot test stand in Huzhou, the R&D efficiency is extremely high[5]

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According to the prospectus data, from 2022 to the first half of 2025, Blue Arrow Aerospace:

• Accumulated losses of approximately RMB 3.464 billion
• Accumulated R&D expenses of RMB 2.29 billion
• Average monthly loss of approximately RMB 82.46 million
  [6]

This characteristic of “high investment, high loss” is a typical financial structure of hard technology enterprises, rather than a result of business failure[3]:

:

1. Early Stage of Commercial Launches
   : Zhuque-2 only achieved its first commercial launch at the end of 2023, with a small revenue scale
2. Continuous High R&D Investment
   : Liquid oxygen methane engines and recoverable technologies require a large amount of verification costs
3. Revenue Recognition Lag
   : The customer decision-making cycle lasts 1-2 years, so revenue recognition lags behind R&D investment[3]

Year	Operating Revenue	Year-on-Year Change
2022	RMB 782,900	-
2023	RMB 3.9521 million	+405%
2024	RMB 4.2783 million	+8%
H1 2025	RMB 36.4319 million	+751%[6]

In May 2025, Zhuque-2 successfully carried 6 satellites from Spacety Research Institute into orbit, achieving launch service revenue of

, marking that the commercialization capability has been verified[6].

Shareholder Type	Representative Institutions	Investment Amount
Market-Oriented VC	Matrix Partners China, Sequoia China, Country Garden Ventures	Early-stage investment
National Industrial Investment Fund	SS Fund	RMB 450 million (January 2024)
National Manufacturing Fund	National-level Fund	RMB 900 million (December 2024)
Local State-Owned Capital	Wuxi Industrial Development Group, Guangdong Construction Engineering Group	-

The heavy investment from national-level funds is interpreted by the market as high recognition from the policy level for the “liquid oxygen methane + recoverable” technical route[6].

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It took SpaceX

to achieve its first profit, experiencing numerous failures and doubts[3]. Its profitability inflection point occurred after the successful networking of Starlink, realizing cash flow reversal through high-frequency launches and satellite internet services[3].

:

• Commercial aerospace is a track of “trading time for space”
• After technology verification, large-scale production is the real business inflection point[3]
• Once regular order launches are realized, the profit closed-loop will be formed quickly

Blue Arrow Aerospace can convey the following core narrative to investors[7]:

• Zhuque-2: The world’s first liquid oxygen methane rocket, with successful commercial launches
• Zhuque-3: Reusable technology verified, close to SpaceX’s level

• Has signed formal launch service contracts with China SatNet and Yuanxin Satellite
• Serves national-level projects such as the “GW Constellation” and “Qianfan Constellation”

• Phase I of the Wuxi project is in the final sprint stage
• Plans to build an intelligent manufacturing base and establish a pulse production line[6]

According to the prospectus, the use of the RMB 7.5 billion raised is as follows[6]:

Project	Amount (RMB 100 million)	Proportion
Reusable Rocket Technology Upgrade Project	47.3	63%
Reusable Rocket Production Capacity Expansion Project	27.7	37%

The core investment is in the mass production capacity construction of Zhuque-3, to provide sufficient launch capacity for future constellation networking demand.

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• Reusable technology is not yet fully mature, and anomalies have occurred in first-stage recovery tests[6]
• The high-thrust stability and multiple ignition reliability of liquid oxygen methane engines still require more flight verification[5]

• Satellite networking progress may fall short of expectations
• Changes in customer launch plans may lead to significant fluctuations in demand[5]

• Cannot achieve profitability in the short to medium term
• Cash flow remains tight, relying on external financing[6]

• The IPO process may be delayed due to on-site inspections
• Industry policies are still being improved, with uncertainties

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: Commercial aerospace is a national strategic emerging industry. As an industry leader, Blue Arrow Aerospace will fully benefit from:

1. Continuous increase in policy support
2. Explosive demand for satellite internet networking
3. Cost reduction brought by mature reusable technology

Indicator	Blue Arrow Aerospace	Benchmark Enterprise
Planned Fundraising Amount	RMB 7.5 billion	-
Core Technology	Liquid oxygen methane engine	SpaceX Starship
Market Position	China’s first commercial rocket stock	Global leader in commercial launches
Order Sources	China SatNet, Yuanxin Satellite	Starlink, government contracts

:

• Institutional investors with long-term investment perspectives
• Thematic investment funds optimistic about the commercial aerospace track
• Industrial capital that recognizes the hard technology investment logic

:

1. Whether Zhuque-3’s first-stage recovery can succeed in 2026
2. Implementation of launch missions by China SatNet and Yuanxin Satellite
3. The company’s mass production capacity and cost control capabilities

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Blue Arrow Aerospace’s cumulative loss of RMB 3.5 billion is an inevitable phenomenon in a specific stage of commercial aerospace development, rather than a sign of business failure. Through analysis, we can see:

1. Industry Level
   : Commercial aerospace is on the eve of policy dividend release and demand explosion, with a trillion-yuan market pattern initially taking shape

2. Company Level
   : Blue Arrow Aerospace has completed core technology verification, obtained strategic endorsement from national-level funds, and holds definite orders

3. Investment Logic
   : The fifth set of listing standards for the STAR Market has opened the door for unprofitable hard technology enterprises, and Blue Arrow Aerospace is expected to become the “first stock of commercial aerospace”

As an industry insider said: “When a private rocket enterprise enters the stage of regular order launches, the time to form a profit closed-loop will come”[3]. For investors with long-term investment perspectives, Blue Arrow Aerospace may be the best window to lay out the commercial aerospace track.

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[1] Securities Times Network - China’s commercial aerospace ushers in dual inflection points of technological breakthrough and scale explosion (https://www.stcn.com/article/detail/3588422.html)

[2] Faxian Report - China’s Commercial Aerospace: A Trillion-Yuan Track of Stars and Seas (https://www.fxbaogao.com/insights/detail/442)

[3] 36Kr - Commercial aerospace stocks soar and plummet, often losing billions, dismantling the money-burning logic behind (https://m.36kr.com/p/3639019671440517)

[4] Sina Finance - China’s satellite constellation plan released, with applications exceeding 200,000 satellites (https://finance.sina.cn/2026-01-17/detail-inhhpwhm3589242.d.html)

[5] CNFOl - Blue Arrow Aerospace Steps into the Liquid Oxygen Methane Era (http://mp.cnfol.com/51345/article/1766628305-142184262)

[6] Sina Finance - Burned RMB 3.5 billion in three and a half years! A group of financiers lead “rockets” to pursue STAR Market listing (https://finance.sina.com.cn/stock/roll/2026-01-06/doc-inhfknak5871211.shtml)

[7] Lichen China - How Should New-Generation Technology Enterprises List in 2026 (https://www.lichenzx.com/news-detail/118.html)

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Report Source: Jinling AI Financial Analysis
Report Date: January 18, 2026