# China Satellite Communications (601698.SHG)

Canonical: https://gigainvestors.com/s/601698.SHG

Analysis as of: 2026-10-16T07:35:15.821Z. Financial observations: FY2014–FY2025.

Listing currency: CNY. Reporting currency: CNY.

## Verdict

Not a wonderful business

Quality tests for Buy: not passed (profit record: pass; earnings resilience is evidence only). Published buy qualification: no.

Share price: CNY 21.47 per share; close as of 2026-10-15.

Estimated value: low CNY 2.06 per share, central CNY 2.17 per share, high CNY 2.31 per share. Buy at or below the central value CNY 2.17 per share. Valuation as of 2026-10-16T07:35:15.821Z; scenarios are not confidence intervals.

Expected annual return: 3.3% at the stated quote. About 3.3% a year at today's price (required return 10.0%). required return 10.0% a year (10% floor; CN 10-year bond 1.7% + 4 points).

## Checklist

### understandable: pass

- 4 revenue declines in the last 10 years (informational)

- Financial history: 10 years

- Years with declining revenue: 4

- Years with a net loss: 0

- Operating margin variation: 0.22×

Chart: Operating margin; fiscal year observations.

- FY2016: 0.36×

- FY2017: 0.33×

- FY2018: 0.28×

- FY2019: 0.27×

- FY2020: 0.27×

- FY2021: 0.32×

- FY2022: 0.28×

- FY2023: 0.22×

- FY2024: 0.17×

- FY2025: 0.17×

### moat: fail

- ROIC median below threshold

- ROIC worst years below threshold (more than 1 bad year allowed)

- Recent gross margin fell 7.6pp below the typical margin (limit 4pp)

- ROIC, median of available years: 8.5%

- ROIC, second-lowest year: 4.7%

- Typical minus recent gross margin: 7.6 pp

- Typical gross margin (annual median): 37.0%

- Recent gross margin (lower of latest and 3-year median): 29.5%

- Years with nonpositive capital: 0

- Capital spending / revenue: 59.7%

- ROIC including acquisitions, ten-year median: 3.1%

Chart: ROIC excluding acquisitions; fiscal year observations.

- FY2016: 9.6%

- FY2017: 9.3%

- FY2018: 8.4%

- FY2019: 8.7%

- FY2020: 8.2%

- FY2021: 9.9%

- FY2022: 8.7%

- FY2023: 5.9%

- FY2024: 4.7%

- FY2025: 3.7%

### economics: fail

- owner earnings cash conversion below threshold

- incremental invested capital return below threshold

- working capital as a share of revenue rose more than 10pp and ends positive

- Owner earnings / net income, 5-yr: 0.54×

- Cash conversion uses consolidated totals: No

- Owner earnings, five-year total: CNY 1.5B

- Net income, five-year total: CNY 2.7B

- Return on incremental invested capital: -8.8%

- Working capital / revenue, annual change: 1.9 pp

- Working capital / revenue, change between three-year averages: 12.8 pp

- Working capital / revenue, final three-year average: 5.4%

Chart: Annual owner cash / profit; fiscal year observations.

- FY2021: 0.69×

- FY2022: 0.25×

- FY2023: 0.11×

- FY2024: 0.62×

- FY2025: 1.23×

### management: fail

- buybacks unrelated to price (informational)

- ROIC first 3 years vs last 3 years: 9.3% vs 4.7%

- Per-share earnings: 0.12 to 0.10 (three-year endpoint medians)

- per-share value declined or ends nonpositive

- five-year and ten-year diluted share growth both above threshold

- Management verdict uses per-share economic progress: Yes

- Ordinary dilution, 10-year annual growth: 1.6%

- Ordinary dilution, 5-year annual growth: 1.1%

- Diluted shares, 10-year annual growth: 1.6%

- Diluted shares, 5-year annual growth: 1.1%

- Per-share value growth: -1.9%

- Per-share value change: CNY -0.02

- Per-share value, starting three-year median: CNY 0.12

- Per-share value, ending three-year median: CNY 0.10

- Average buyback yield: 2.3%

- Buyback history: 1 years

- Debt-funded buybacks: No

- Acquisition spending: CNY 1.4B

- Cumulative net income, 10 years: CNY 4.9B

- ROIC, first three-year median: 9.3%

- ROIC, last three-year median: 4.7%

Chart: Earnings per share; fiscal year observations.

- FY2016: CNY 0.12

- FY2017: CNY 0.11

- FY2018: CNY 0.12

- FY2019: CNY 0.11

- FY2020: CNY 0.12

- FY2021: CNY 0.14

- FY2022: CNY 0.23

- FY2023: CNY 0.08

- FY2024: CNY 0.11

- FY2025: CNY 0.10

### accounting: pass

- Sloan accruals: -4.1%

- Receivables to sales index (DSRI): 1.32×

- Restructuring years, last five: 0

- Earnings backed by cash: Yes

- Operating cash / earnings: 3.10×

- Accounting red flags: 0

- Goodwill and intangibles / equity: 0.09×

Chart: Sloan accruals; fiscal year observations.

- FY2016: -7.4%

- FY2017: -9.0%

- FY2018: -9.8%

- FY2019: -8.4%

- FY2020: -8.5%

- FY2021: -8.9%

- FY2022: -2.4%

- FY2023: -6.4%

- FY2024: -6.1%

- FY2025: -4.1%

## Holders

## Price story

Down 44% since Jan 2026 · sales +4.1%

Story as of 2026-10-16T10:00:04.244Z; price observation 2026-10-15.

Price needs cash profits to grow 43.2% a year for ten years

### Sales · FY2024–2025

sales +4.1%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: CNY 2.5B 

- FY2017: CNY 2.6B 

- FY2018: CNY 2.7B 

- FY2019: CNY 2.7B 

- FY2020: CNY 2.7B 

- FY2021: CNY 2.6B 

- FY2022: CNY 2.7B 

- FY2023: CNY 2.6B 

- FY2024: CNY 2.5B 

- FY2025: CNY 2.6B 

### Gross margin · FY2025

gross margin 29.5%; source https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/; observed 2026-10-16.

- FY2016: 43.0% 

- FY2017: 46.7% 

- FY2018: 43.9% 

- FY2019: 39.9% 

- FY2020: 36.0% 

- FY2021: 37.5% 

- FY2022: 36.5% 

- FY2023: 35.7% 

- FY2024: 27.7% 

- FY2025: 29.5% 

## Owner memo

Memo as of 2026-10-16T08:06:05.509Z.

### How it makes money

Operates in telecom services; annual sales are CNY 2.6 billion.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2025: revenue 2644781668.57; grossProfit 778893398.74; margin = grossProfit / revenue.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601698.SHG: China Satellite Communications Co., Ltd. provides satellite communications and broadcasting services. It offers business support platforms, including visualized platform to support design, simulation, and evaluation on satellite resources and satellite application; multi-satellite unified tracking, telemetry, and control (TT&C) platform; traditional beam comprehensive service; carrier grade satellite broadband business and operation infrastructure platform; and satellite application platforms for airborne, maritime, emergency response, and universal services. The company also provides long-term and temporary rental services of satellite resources; TT&C, consulting for satellites and related applications, training, network access testing and antenna certification, and geosynchronous orbit communication satellite interference positioning services; bandwidth rental services for TV channels distribution, contribution and direct-to-home broadcast through satellites; and OU services to transmit radio and television programs. In addition, it offers leasing services for space segments; uplink service, HUB hosting and operation, and other teleport services; information services, such as remote sensing images, and location and weather information; consultation, certification, training, advertising, and other related services; and integrated information services in land, sea, and air for sensing and transmission. Further, the company provides emergency communications; private network communication network; universal services based on satellite communication; E-education; telecommunication services; satellite-based IoT solutions; streaming media, audio and video transmission, and live broadcasting; smart monitoring and early warning services; and services for marine and airborne applications. The company was founded in 2001 and is based in Beijing, China. China Satellite Communications Co., Ltd. operates as a subsidiary of China Aerospace Science and Technology Corporation.

### Why customers stay

Margins ranged from 27.7% to 35.7% during 2023–25; it earns 8.5% on its capital.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2023: grossProfit / revenue = 35.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2024: grossProfit / revenue = 27.7%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2025: grossProfit / revenue = 29.5%.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); 10-year return on capital observations [[2016,0.09590077007071861],[2017,0.09346685639119443],[2018,0.08380553037435724],[2019,0.08694563636824257],[2020,0.08243220292818512],[2021,0.09922734153580216],[2022,0.08653299573248432],[2023,0.05917834872925494],[2024,0.04681767902645685],[2025,0.037190704379399885]]; median 0.08516926305342079. ROIC follows the displayed moat series; financial companies use return on tangible equity.

### Can it raise prices

Kept about a 36% gross margin through 2022 cost inflation.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); Gross margin observations: [[2021,0.375423526129434],[2022,0.364701587355852],[2023,0.35706909086675626]]; range within 2 percentage points.

### Where the cash goes

Paid dividends in 10 of 10 years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2016: growth capex 392676587.55170584; upkeep 1524715652.4482942; owner earnings 26698951.551705837. Growth capex / owner earnings = 14.707565830487345.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2018: growth capex 0; upkeep 1116633151; owner earnings 544189913. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2019: growth capex 168490007.90117955; upkeep 1727615127.0988204; owner earnings 64326005.90117955. Growth capex / owner earnings = 2.6193140012458.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2020: growth capex 0; upkeep 1370681676; owner earnings 436356297. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2021: growth capex 0; upkeep 1356147557; owner earnings 393539892.198. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2022: growth capex 371099248.4539709; upkeep 2024369318.546029; owner earnings 228378679.65291905. Growth capex / owner earnings = 1.6249294768581417.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2023: growth capex 0; upkeep 1647559077; owner earnings 36790673.90894055. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2024: growth capex 0; upkeep 1433158741; owner earnings 281690326.5953728. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); FY2025: growth capex 0; upkeep 1170574530.11; owner earnings 540691610.646404. Growth capex / owner earnings = 0.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); Dividend observations: [[2016,103496059],[2017,99680487],[2018,193864924],[2019,91999999],[2020,91999999],[2021,100000000],[2022,116056879],[2023,184876221],[2024,107233621],[2025,136447648.81]]. Zero only counted when supported by a complete cash-flow statement.

### Are managers owners

Insiders own 76.9% of the company.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16); 601698.SHG SharesStats.PercentInsiders = 76.92999999999999 percentage points; cache date 2026-10-16.

### What the price says

The price assumes cash profits grow 43.2% yearly over ten years.

- Source: https://eodhd.com/financial-apis/stock-etfs-fundamental-data-feeds/ (filed 2026-10-16T07:35:15.821Z); Ten-year compound average after fade. Initial solved rate 0.629479676568766. Price 21.47; FX 1; discount 0.1; same standard ten-year fade to terminal 0.03. FY2015 owner earnings/share -0.13213672265609255 → FY2025 0.12793191343975396. Closing-price date 2026-10-15.

## Monthly share-price history (CNY per share)

- 2019-06: CNY 3.92 per share

- 2019-07: CNY 10.89 per share

- 2019-08: CNY 11.87 per share

- 2019-09: CNY 11.70 per share

- 2019-10: CNY 10.30 per share

- 2019-11: CNY 9.99 per share

- 2019-12: CNY 11.32 per share

- 2020-01: CNY 13.70 per share

- 2020-02: CNY 16.71 per share

- 2020-03: CNY 14.29 per share

- 2020-04: CNY 17.02 per share

- 2020-05: CNY 18.63 per share

- 2020-06: CNY 18.01 per share

- 2020-07: CNY 23.07 per share

- 2020-08: CNY 22.93 per share

- 2020-09: CNY 19.39 per share

- 2020-10: CNY 17.31 per share

- 2020-11: CNY 19.39 per share

- 2020-12: CNY 18.14 per share

- 2021-01: CNY 17.41 per share

- 2021-02: CNY 16.38 per share

- 2021-03: CNY 15.55 per share

- 2021-04: CNY 15.61 per share

- 2021-05: CNY 16.45 per share

- 2021-06: CNY 16.19 per share

- 2021-07: CNY 13.56 per share

- 2021-08: CNY 15.78 per share

- 2021-09: CNY 14.54 per share

- 2021-10: CNY 13.90 per share

- 2021-11: CNY 15.14 per share

- 2021-12: CNY 14.39 per share

- 2022-01: CNY 13.28 per share

- 2022-02: CNY 13.53 per share

- 2022-03: CNY 11.59 per share

- 2022-04: CNY 9.97 per share

- 2022-05: CNY 10.94 per share

- 2022-06: CNY 11.31 per share

- 2022-07: CNY 11.18 per share

- 2022-08: CNY 11.33 per share

- 2022-09: CNY 9.92 per share

- 2022-10: CNY 11.68 per share

- 2022-11: CNY 12.42 per share

- 2022-12: CNY 11.42 per share

- 2023-01: CNY 12.49 per share

- 2023-02: CNY 13.56 per share

- 2023-03: CNY 21.22 per share

- 2023-04: CNY 17.87 per share

- 2023-05: CNY 17.94 per share

- 2023-06: CNY 19.88 per share

- 2023-07: CNY 17.90 per share

- 2023-08: CNY 17.05 per share

- 2023-09: CNY 16.97 per share

- 2023-10: CNY 19.00 per share

- 2023-11: CNY 18.20 per share

- 2023-12: CNY 17.31 per share

- 2024-01: CNY 14.29 per share

- 2024-02: CNY 16.89 per share

- 2024-03: CNY 16.00 per share

- 2024-04: CNY 15.24 per share

- 2024-05: CNY 15.59 per share

- 2024-06: CNY 14.09 per share

- 2024-07: CNY 17.57 per share

- 2024-08: CNY 15.00 per share

- 2024-09: CNY 17.28 per share

- 2024-10: CNY 17.00 per share

- 2024-11: CNY 23.17 per share

- 2024-12: CNY 20.40 per share

- 2025-01: CNY 19.19 per share

- 2025-02: CNY 19.73 per share

- 2025-03: CNY 19.05 per share

- 2025-04: CNY 18.93 per share

- 2025-05: CNY 19.57 per share

- 2025-06: CNY 20.47 per share

- 2025-07: CNY 20.08 per share

- 2025-08: CNY 25.30 per share

- 2025-09: CNY 21.31 per share

- 2025-10: CNY 21.69 per share

- 2025-11: CNY 20.75 per share

- 2025-12: CNY 35.73 per share

- 2026-01: CNY 38.00 per share

- 2026-02: CNY 37.32 per share

- 2026-03: CNY 33.00 per share

- 2026-04: CNY 36.67 per share

- 2026-05: CNY 30.10 per share

- 2026-06: CNY 30.25 per share

- 2026-07: CNY 25.22 per share

- 2026-08: CNY 24.40 per share

- 2026-09: CNY 22.60 per share

- 2026-10: CNY 22.30 per share

## Annual estimated value (CNY per share)

- FY2018: low CNY 0.80 per share, central CNY 0.82 per share, high CNY 0.83 per share

- FY2019: low CNY 1.07 per share, central CNY 1.09 per share, high CNY 1.10 per share

- FY2020: low CNY 1.17 per share, central CNY 1.19 per share, high CNY 1.23 per share

- FY2021: low CNY 2.29 per share, central CNY 2.44 per share, high CNY 2.63 per share

- FY2022: low CNY 2.43 per share, central CNY 2.58 per share, high CNY 2.78 per share

- FY2023: low CNY 1.73 per share, central CNY 1.81 per share, high CNY 1.91 per share

- FY2024: low CNY 2.23 per share, central CNY 2.33 per share, high CNY 2.47 per share

- FY2025: low CNY 1.82 per share, central CNY 1.93 per share, high CNY 2.06 per share

Historical values use today's bond yield for every fiscal year

Historical values use today's FX rate into trading currency for every fiscal year

Historical values use current restated fundamentals and current commodity classification; they are not point-in-time estimates

## Sources

Estimates depend on assumptions and are not guarantees or investment advice. Underlying data remains subject to its source licenses; public reading does not grant bulk redistribution rights.

## Reported holder observations