SpaceX’s $75 billion
IPO is fuelling a frenzy among investors in Asia for ETFs and
supply chain partners linked to Elon Musk’s rocket company that
are likely to benefit from the blockbuster deal.
Shares of satellite and rocketry-related companies worldwide have surged as everything from Starlink component manufacturers to ETFs that own private shares in SpaceX draw strong demand.
Retail investors are set for a larger-than-usual slice of
the big-ticket IPO, with SpaceX considering allocating as much
as 30% to individual investors while targeting a valuation of
about $1.75 trillion. The final IPO price is due to be set on
June 11, with trading on Nasdaq starting the next day.
However, with restrictions in parts of Asia on how retail
investors may access the IPO, traders are scoping out regional
suppliers to ride the SpaceX-driven rally.
Hu Xiaobin, a retail investor from Anhui province, bought
speculative plays in China, buying Sunway Communication
, a supplier to Starlink ground terminals, and
Western Superconducting Technologies, a supplier of
specialty metals for rockets, over the past two months.
“I dug out adjacent companies in A-shares by myself and made
quite a bit of money,” he said, deeming it “value speculation.”
Hu, a big fan of Musk, has exited the two stocks ahead of the
SpaceX IPO.
Shenzhen-listed shares of Lens Technology, a
supplier to Apple and Tesla, have surged nearly 50% to
record highs this year after the company flagged commercial
space as a new growth driver.
Investor enthusiasm has been further fuelled by optics: Lens
Chairman Zhou Qunfei was seated between Apple CEO Tim Cook and
Musk at a Beijing banquet in May held to welcome U.S. President
Donald Trump, spurring wagers that the company could deepen
business ties with Musk’s firms.
“For local retail investors, getting a direct piece of the
IPO book is going to be incredibly tough,” said Jeffrey Chan, a
director at Hong Kong’s Central Asset Management, adding that
SpaceX is probably a must-own asset for global growth funds.
SpaceX’s website and IPO marketing documents were not
accessible in Hong Kong and mainland China, a Reuters review
showed last week, while Bloomberg reported the space firm’s
underwriters have barred investors in China and Hong Kong from
participating in the IPO.
SPACE STOCKS TAKE OFF
Shares of several European companies, including French
satellite operator Eutelsat, German satellite maker OHB
and Luxembourg-based SES, have posted
double-digit gains this year.
There has also been a flurry of space-themed ETF listings.
Tema Space Innovators ETF, which has a 6.49%
private exposure to SpaceX’s pre-IPO shares, is up 29% since its
launch in March.
Tradr 2x Fly Long Daily ETF, a twice-levered bet on
Firefly Aerospace, an unprofitable space company that
performed the first successful commercial Moon landing last
year, is another popular but volatile bet.
Still, strategists say the phenomenon remains largely driven
by retail money, with institutional investors showing little
appetite so far.
“It’s a great story if you’re a trader, and you’d want to
bring it up,” said Nicholas Smith, Japan strategist at CLSA in
Tokyo. “But I doubt people would be making big bets on this.”
TAIWAN FOCUS
In Asia, investors see Taiwan as a key gateway to the SpaceX
supply chain.
The island is home to satellite component makers Chin-Poon
Industrial, Wistron NeWeb and Universal
Microwave Technology, all of which have said they
supply parts to Musk’s rocket company.
Central Asset Management’s Chan pointed to Taiwan’s Compeq
, Tong Hsing Electronic and Kinpo
as well as Japan’s Meiko Electronics as some of the
names traded as proxies for SpaceX exposure in Asia.
Nick Wilcox, managing director for discretionary equities at
Man Group, said the IPO will inject capital that could trickle
down to companies in the supply chain.
“We will see them (SpaceX) forging greater tie-ups with
suppliers to facilitate the next leg of CAPEX. And there is a
raft of Asian companies that will be highly benefiting from
that,” Wilcox added.