HONG KONG (Hong Kong Aerospace Technology Group PR) — Hong Kong Aerospace Technology Group Limited (HKATG; 01725. HK) announced its strategic cooperation with the Company and Shandong Institute of Industrial Technology for the construction and operation of the first high-resolution agricultural satellite constellation (”Golden Bauhinia — Qilu Satellite Constellation”) on 4 April. It is known that the first phase of the project comprising 9 satellites and the first experiment satellite is expected to be launched in July 2022, and the remaining eight operational satellites with 8-band multi-spectral observation capability will be launched in December 2022.
After the news came out, a huge amount of smart money poured into HKATG, its stock soared for 4 consecutive days between 4 April and 8 April. HKATG recorded a four-day gaining streak from its latest low of HK$12.2, in addition to crossing above 10-day and 20-day exponential moving average (EMA), the stock, a new high in three months was made during intraday trading on 8 April. HKATG surged by more than 100% in a few days, and the trading volume moved against the market which up to nearly 800,000 shares, with a capital of HKD 16.83 million involved and an amazing momentum.
According to the Flow of Funds, several foreign and local banks have been increasing their holdings in the past few days, showing confidence in HKATG’s prospects. Previously, HKATG announced its collaboration with the College of Engineering of the City University of Hong Kong (”CityU”), the parties have entered into a letter of intent (the ”LOI”) concerning the strategic cooperation in the research and development of advanced satellite technology and related applications in Hong Kong, covering communication systems, antenna technology, advanced materials, data processing, and energy management. With the dominant position in the local commercial aerospace market, HKATG is well-positioned for endless business opportunities.
Annual Results Not Fully Reflected Upcoming Profits
HKATG announced the consolidated annual results for the year ended 31 December 2021, though the gross profit recorded a year-over-year decline of approximately 25.2%, smart investors seem to be aware that last year’s results did not reflect several strategic agreements signed by the company since the beginning of 2022, so they bought immediately while the stock price pulled back.
If you read the company’s annual report carefully, it is not difficult to analyze the reasons that influence HKATG’s gross profit in 2021. The company’s key construction, the Satellite Operation Control, and Application Centre at the AMC Premises put into operation last year, which has led to an increase in operating costs while representing a milestone in the production capacity expansion. It is worth mentioning that, according to the latest annual results, the company’s net impairment losses on financial assets as of 31 December 2021 have narrowed significantly, from RMB 5,122,000 in 2020 to RMB 131,000 in 2021, the result is quite encouraging.
An exclusive aerospace manufacturer in HK
According to the management of HKATG, the company will gradually put into production batches of optical remote sensing satellites, these satellites will have different types of payloads such as multi-spectral and synthetic aperture radar and can comprehensively provide satellite remote sensing data and products that integrate different bands. The company also announced earlier that those 25 satellites are planned to be launched in 2022 for the “Golden Bauhinia Constellation”, and the ”Golden Bauhinia Satellite No. 1 (04)” is also ready to launch. With the launch of small satellites in batches, HKATG is expected to realise the on-orbit verification of miniaturized aerospace systems, laying the foundation for next year’s business constellation development.
”Golden Bauhinia Satellite No. 1 (04)” is another pilot satellite of the “Golden Bauhinia Constellation”, on the one hand, the satellite will conduct on-orbit testing and verification of micro-miniature remote sensing payloads, and on the other hand, the data generated during the satellite’s in-orbit operation will be widely used in agricultural monitoring, disaster prevention, and mitigation, as well as comprehensive urban management and watershed control.
Taking the supporting role in the development of Hong Kong into an international innovation and technology hub, HKATG certainly has a market-dominating position with explosive growth potential in the upcoming years and beyond.