Aerospace: Key Takeaways from the Morgan Stanley Space Summit

4th Annual MS Space Summit

We offer our sincere thanks to all of the participants who made today’s 4th Annual Morgan Stanley Space Summit such a successful event. We offer some high-level takeaways from the summit below. For further discussion, please don’t hesitate to reach out to the Morgan Stanley Space Team.

Show Me the Profit

• 2021 marks a banner year for space as fresh capital pours into the sector.
• After a wave of recent space de-SPACings, investors are now turning their focus toward execution, profitability and return on investment.
• The challenge facing investors is separating wheat from chaff and identifying companies that have not only discriminating technology, but also sustainable business models.

Commercialization and Militarization Trends Continue

• Reductions in launch and payload costs continue to drive commercialization.
• Space infrastructure players are keeping costs low by leveraging COTS components and avoiding expensive space-rated parts when not critical to system designs.
• Near-peer threats continue to drive U.S. investment in space, particularly as the barriers to space access have fallen for adversaries and new threats (e.g., hypersonics) are placing a premium on space-based tracking capabilities.
• While satellite redundancy in LEO can increase resiliency, LEO constellations must be cyber-hardened to avoid loss of control over assets and data flow interference.
• A burgeoning race for the first commercial space stations stands as a catalyst for in-space manufacturing, biotech, and more novel ideas.

The Space Debris Conundrum

• Russia’s recent ASAT test and the risk to satellites from space debris were hot topics at today’s summit.
• We heard a chorus of concern over the threat from debris, but with varying degrees of urgency.
• Companies are exploring technical solutions to debris mitigation, but are doing so with caution, as the jury is still out regarding who will foot the cleaning bill.

SPace as a Service (SPaaS)

• Moving from Sensor to Data to Analytics… to Insights that unlock the economic value of space.
• The value-added in the space economy is migrating away from hardware and towards data/analysis.
• Getting out of a ‘single modality’ mindset in EO and sat comms.
• Space is becoming ‘awash in sensors.’ The key is combining them.
• Space infrastructure servicing and logistics are emerging as key themes in the next wave of venture investing.

The Many Paths to Mass Market SATCOM

• Each of the four SATCOM companies we hosted is charting a different path to much wider adoption of SATCOM services. They included two current operators (ViaSat, Iridium) and two new entrants (AST SpaceMobile, Astranis).
• It remains to be seen which path may prove correct or if multiple paths can succeed. Plans span orbital altitudes, asset sizes and service offerings.
• The theoretical TAM is well over $100bn, but questions about core economics remain.
• The next 1-3 years will be key given the number of planned service launches.

Space from an ESG Perspective

• Earth observation companies are seeing new demand driven by a growing emphasis on sustainability.
• Emerging use cases include leveraging space-based data to monitor emissions, track deforestation and map the world’s coral reefs.