Analysis of Reco Defense (002413.SZ) - A Hot Stock: Unpacking Market Attention Driven by the Satellite Internet Concept

Reco Defense made it to the hot stocks list on January 23, 2026, with a significant rise in market attention. According to analysis, this popularity is mainly driven by the following factors [1][2]:

is the primary driving factor. Since the start of 2026, the satellite internet concept has emerged as one of the most standout sectors in the A-share market, with multiple individual stocks rising over 40% in just one week. As a core target in this sector, Reco Defense has directly benefited [1]. The company also added the “leading stock” concept on January 20, 2026, further boosting market attention [2].

brings tangible positive benefits. Reco Defense confirmed on the investor interaction platform that its remote sensing business in satellite applications and products related to microwave components can be applied in the commercial aerospace field. In its 2024 semi-annual report, the company also confirmed that it “undertaken supporting tasks for the Star Network project”, making it a key beneficiary of commercial aerospace development [3].

is a short-term stimulating factor. As of the close on January 22, 2026, main capital recorded a net inflow of RMB 137 million (accounting for 3.49% of total turnover), hot money recorded a net inflow of RMB 67.5316 million, while retail capital recorded a net outflow of RMB 205 million. This indicates that institutional capital is flowing back, while retail investors are taking profits at high levels [4].

From a technical analysis perspective, Reco Defense has shown severe volatility recently [0]. It fell from a periodic high of RMB 20.13 on January 12 to a low of RMB 12.64 on January 20, representing a maximum drop of 37.2% over 8 trading days; it then rebounded to RMB 15.00 over the next 5 trading days, with a rebound amplitude of 18.7%. Such extreme volatility reflects the high-risk nature of this stock.

The current share price is in a sideways consolidation pattern, with a technical range of RMB 14.31 (support level) to RMB 15.60 (resistance level). The KDJ indicator shows a bearish signal. The total trading volume over the past 10 trading days reached 313 million shares, with an average daily trading volume of 3.11 million lots, which is 15.6% higher than the average level of 2.69 million lots, indicating extremely high capital attention [0].

Reco Defense is involved in a wide range of concept sectors, including 6G, Eastern Data Western Calculation/Computing Power, Artificial Intelligence, DeepSeek Concept Stock, Internet of Vehicles (Vehicle-Road Coordination), Large Aircraft, Huawei Concept, 5G Concept, Memory, LiDAR, Satellite Internet, Intelligent Transportation, Millimeter Wave Radar, Automotive Electronics Concept, UAV, Chip Concept, Beidou Navigation, BYD Concept, Millimeter Wave, and Autonomous Driving, among other hot sectors [2]. The concept superposition effect gives it high attention and flexibility amid rotating market hotspots.

Reco Defense’s multi-business layout has formed a unique cross-field synergy effect. The company’s main businesses cover five sectors: Radar Systems (33.48%), Intelligent Control (29.83%), Satellite Applications (20.92%), Secure Storage (13.05%), and Intelligent Connected Systems (1.29%) [8], forming an all-round national defense equipment system layout covering land, sea, air, and space dimensions.

Against the backdrop of the rapid development of commercial aerospace and satellite internet, the company’s undertaking of supporting tasks for the Star Network project marks its strategic transformation from a traditional military enterprise to expanding into the commercial aerospace sector. The military electronics track benefits from the long-term trend of expanding global defense spending, while satellite internet benefits from national strategic support and rapid growth in market demand. The superposition of these two main lines provides the company with a dual growth engine [5].

Notably, capital flow data on January 22 shows a net outflow of RMB 205 million from retail investors and a net inflow of RMB 137 million from main capital. This pattern of “main capital taking positions while retail investors take profits” may indicate short-term adjustment risks [4]. However, main capital recorded a net outflow of RMB 327 million on January 20 [7], showing that main capital flows in and out frequently. Investors need to closely track capital movements.

The current P/S (Price-to-Sales ratio) is as high as 13.36x, while the TTM net profit is negative, P/E is -56.09x, and ROE is -10.36% [0]. This reflects that market expectations for its future growth have been largely priced into the current share price. This divergence between valuation and fundamentals is one of the major risk points for investing in this stock.

: Amidst losses, a P/S ratio as high as 13.36x is overvalued, posing the risk of a valuation bubble [0]. A cumulative increase of 272.21% over the past year has accumulated a large number of profit-taking positions. If market sentiment shifts, the stock may face a sharp correction [0].

: The extreme volatility of a 37% drop from the high over 8 trading days indicates a high risk level for this stock. Main capital recorded a cumulative net outflow of RMB 5.383 billion over the previous 10 days [7], and frequent capital inflows and outflows exacerbate volatility.

: The satellite internet concept shows signs of overheating. If the sector as a whole corrects, Reco Defense may be significantly impacted.

: The company is currently in a loss-making state. Military product prices face downward pressure due to policy influences, and the physical bidding model for projects has increased R&D expenses, which may further compress profit margins [0].

: Commercial aerospace and satellite internet are supported by national strategies, and the industry is in a period of rapid development. The company is expected to continue receiving policy support and order growth [5].

: The company’s multi-track layout (radar systems, satellite applications, intelligent control) forms a synergy effect, giving it long-term growth potential against the backdrop of national defense modernization and commercial aerospace development.

: A current ratio of 2.08 and a quick ratio of 1.37 indicate that the company has good short-term debt-paying ability [0]. Its relatively sound financial condition provides support for business development.

: A Beta of 0.33 indicates low correlation with the broader market, which may provide certain defensive properties when systemic market risks emerge [0].

The core driving factors for Reco Defense becoming a hot stock are the superposition effect of multiple hot concepts including satellite internet, military electronics, and commercial aerospace, as well as the return of main capital after a period of substantial outflows. The company’s business aligns with national strategic directions, with promising long-term development, but in the short term, it faces risks such as overvaluation, performance losses, and severe volatility.

From an investment value perspective, the company is currently in a concept hype phase, with fundamentals not yet providing effective support. Short-term operations require strictly setting a stop-loss level (suggested at RMB 14.30). Medium- to long-term investors may wait for valuation reversion before considering positioning. Given its high volatility and concept stock characteristics, this stock is suitable for investors with a higher risk appetite, and is not recommended for risk-averse investors.

Price Type	Price	Description
Immediate Support	¥14.31	Short-term technical support level
Immediate Resistance	¥15.60	Short-term technical resistance level
Strong Support	¥12.64	Periodic low on January 20
Strong Resistance	¥17.00-18.00	Previous high-volume trading zone

Release of the company’s financial report (expected in April 2026), policies related to satellite internet, announcements of new company orders, and daily changes in main capital flows.