Is SKY Perfect JSAT the Protagonist of the 'Space Defense Bubble' or a Real Powerhouse?

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Conclusion:

The core of SKY Perfect JSAT's stock price growth is space defense. The success of Kirameki No. 3, optical data contracts for the Ministry of Defense, and investments in low-Earth orbit observation have boosted growth expectations. Moving forward, I will be watching for the accumulation of long-term contracts and the reliable execution of launches and development. Changes in policy and exchange rates are the primary risks.

Outline:

Chapter 1: Why did the stock price rise?
• Background of the approximately 2.2x increase in one year
• Inflow of funds into space and defense-related sectors
• Expectations read from the range of the past year

Chapter 2: What are they doing in space defense?
• Successful launch of the X-band satellite 'Kirameki No. 3'
• Provision of optical satellite data to the Ministry of Defense (approx. 9 billion yen)
• Satellite constellation orders
• Laser communication (GEO optical communication) demonstration

Chapter 3: What are the next seeds for growth?
• Approximately $230 million investment in low-Earth orbit observation satellites (collaboration with Planet Labs)
• Ordering and renewal of JSAT-32
• Value expansion through international cooperation

Chapter 4: Who is in charge of what? How do they earn money?
• SKY Perfect JSAT: Satellite operation, data sales, and services
• NTT / Space Compass: New communication networks such as laser communication
• Overseas manufacturers: New satellite manufacturing (e.g., JSAT-32)
• Government (Ministry of Defense, etc.): Demand through long-term contracts
• Revenue pillars: Broadcasting/communications, government contracts, observation data

Chapter 5: Focus only on this: Risks and checks
• Delays in launches and development
• Dependence on government demand and policy changes
• Exchange rate impact
• Notable events: New orders, launches, and deliveries
• Operational indicators: Utilization rates and order backlog

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Chapter 1: Why did the stock price rise?

The stock price of SKY Perfect JSAT (9412) rose significantly in 2025, reaching approximately 2.2 times its previous value. The background to this is that, in addition to traditional broadcasting and communication satellites, its presence in the 'space defense' sector has increased rapidly. Investor funds have flowed toward 'predictable revenue sources' such as long-term defense-related contracts and new satellite projects, and the company has become the recipient of these funds.

In terms of materials, the 'successful launch of Kirameki No. 3', the Ministry of Defense's X-band defense communication satellite, is symbolic. By being deployed via the H3 rocket No. 4, a three-satellite system responsible for ground troop communications has been established, advancing the strengthening of domestic security communication infrastructure. Milestones in space policy act as a tailwind for operators providing related services.

Next, the approximately 9 billion yen optical satellite data provision contract (for the Ministry of Defense) is a move to thicken the 'stock-type' pillar of data sales. Furthermore, regarding the Ministry of Defense's satellite constellation project, Mitsubishi Electric, Mitsui & Co., SKY Perfect JSAT, and others are moving toward a basic agreement, and the foundation for anticipating 'stable government demand' such as priority imaging is progressing. This accumulation of government demand contributes to revenue stabilization, which is different from the highly volatile private demand.

In terms of growth investment, the company announced an approximately $230 million investment in low-Earth orbit (LEO) observation, stepping into the image data business by utilizing Planet Labs' Pelican satellites. For the renewal of geostationary orbits, they ordered JSAT-32 from Thales Alenia Space, advancing the generational change of communication satellites. In addition, Space Compass, a joint venture with NTT, has been contracted for the Ministry of Defense's GEO optical communication (laser) demonstration, paving the way for future high-capacity, low-latency space data relay networks. This three-layer structure of communication (GEO) x observation (LEO) x government demand has prompted a redefinition of its valuation.

The stock price range for the past year is 901 to 2,249 yen. This range appears to be the result of incorporating (1) 'technology and policy momentum' due to the success of H3, (2) the 'visualization' of long-term government contracts and capital investment, and (3) the expansion of the observation x communication portfolio, in that order. Currently, event confirmation, such as the announcement of additional orders, satellite launches and deliveries, and progress in optical communication demonstrations, will be the next evaluation axis. Even if the inflow of funds into defense and space settles down, as long as the accumulation of results continues, the company's premium is likely to be maintained.

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Chapter 2: What Are They Doing in Space Defense?

SKY Perfect JSAT is simultaneously strengthening three core areas of space defense: 'security communications,' 'observation data,' and 'next-generation transmission.' It is not a one-off event, but rather characterized by a series of cumulative projects involving orders, demonstrations, and operations. First, the

successful launch of the X-band defense communication satellite 'Kirameki No. 3'. It was placed into orbit by the H3 rocket No. 4, increasing the redundancy of the X-band, which handles communications for land, sea, and air units. With the policy milestones now visible, the external form of related services is also taking shape (based on JAXA's launch result announcement). Next, the

provision of optical satellite data (approx. 9 billion yen) to the Ministry of Defense. This is not a sale of the satellite itself, but a model that monetizes the 'regular supply of data' in the form of observation images, serving as a foundation for continuous revenue. Investors are highly interested in the increasing ratio of data sales as a pillar alongside broadcasting and communications. The third is the satellite constellation order

. This is a framework to increase coverage and frequency of observation and communication through a network of multiple satellites, with SKY Perfect JSAT and Mitsui & Co. announcing the order. The design is premised on meeting government requirements such as priority imaging, and the development of a system tailored to domestic demand is underway. The fourth is laser communication (GEO optical communication) demonstration

. Space Compass, a joint venture with NTT, has been commissioned by the Ministry of Defense for technical demonstrations, verifying the potential for high-capacity, low-latency transmission between satellites and between space and ground. In the future, applications such as mass transmission of observation data, load balancing for private ground stations, and interoperability in international cooperation are in view. These four layers complement each other. 'Kirameki No. 3' solidifies the communication foundation, optical data creates continuous revenue, the constellation increases supply capacity, and GEO optical communication resolves transmission bottlenecks. Each has progress milestones such as launches, demonstrations, and contracts, and each announcement or delivery serves as the next material for evaluation. In the near term, the focus will be on 'news flow that can be confirmed with numbers,' such as disclosures of additional orders, reports on demonstration results, and usage records of data sales. —

Chapter 3: What Are the Next Seeds for Growth?

SKY Perfect JSAT's next growth axis is emerging in three layers: full-scale entry into Low Earth Orbit (LEO) observation, renewal investment in Geostationary Orbit (GEO), and optical communication collaboration involving Japan, the US, and Europe. First, in LEO, they plan to invest approximately 230 million dollars in partnership with Planet Labs to build an observation satellite constellation centered on Pelican. A revenue story has been clarified, aiming for a 10-satellite scale deployment by 2027 and approximately 23 billion yen in satellite data sales in fiscal year 2030, revealing a second pillar to add to traditional broadcasting and communications. Here, since imaging frequency and retrieval speed determine product value, the number of units and the development of the operational system directly translate into competitiveness. In the GEO renewal, they have ordered

JSAT-32 from Thales Alenia Space, with a launch planned for 2027. By introducing a long-life, high-capacity next-generation machine, they will improve the quality and capacity of existing video distribution and corporate communications, while expanding the 'receptacle' to handle observation data derived from LEO and future government demand. By combining the robustness of GEO with the agility of LEO, they are moving toward a portfolio that uses the optimal orbit for each application. In international cooperation, Space Compass is handling the demonstration of GEO

optical communication as a project for Japan's Ministry of Defense, and has further concluded an MoI with the European Space Agency (ESA) for interconnection of optical inter-satellite networks. They have also signed an MoU with the Greek satellite operator Hellas Sat to verify interconnection with GEO data relay satellites. If a mechanism is established to connect GEO and LEO with lasers and bridge them quickly to ground lines, the 'freshness' of observation data will increase, allowing them to capture price premiums in areas with high time value such as disaster prevention and security. In addition, the start of the first bilateral space cooperation (related to QZSS-HP)

between the US Space Force's Space Systems Command and Japan is material that will further advance Japan-US interoperability in the fields of space situational awareness and positioning. Through a three-in-one formation of expanding the number of units in LEO, increasing capacity in GEO, and becoming an international hub that bundles both with optical communication, SKY Perfect JSAT is raising its evaluation axis from a standalone 'satellite operator' to a observation x transmission x integration platform business. —

Chapter 4: Who is in charge of what? How do they make money?

SKY Perfect JSAT's space defense business has a clear division of roles, and its revenue is designed by stacking stable income from broadcasting and communications with long-term government contracts and observation data sales. The players are broadly divided into SKY Perfect JSAT (operations and services), NTT/Space Compass (new communication networks such as laser communications), overseas manufacturers (satellite manufacturing and technology supply), and the government (demand creation and contracting by the Ministry of Defense).

In addition to operating existing GEO satellites, SKY Perfect JSAT is proceeding with the procurement of the next-generation JSAT-32 to boost the quality and capacity of broadcasting and corporate communications. In parallel, it is expanding its 'data sales' revenue stream through regular provision of optical satellite data to the Ministry of Defense (approx. 9 billion yen). Furthermore, it is participating in satellite constellation projects that increase imaging frequency with multiple satellites, strengthening its 'platform' orientation that bundles services through both observation and communication.

The joint venture with NTT, Space Compass, has been commissioned by the Ministry of Defense for a GEO optical communication (laser) demonstration. If it can establish high-capacity, low-latency transmission between satellites and between space and ground, it will enhance the 'freshness' and availability of observation data for disaster response and defense purposes, and add a high-value-added transmission layer to SKY Perfect JSAT's observation and communication services. This is also expected to lead to higher future service unit prices and longer contract periods.

Overseas manufacturers are the source of hardware and technology. Thales Alenia Space has won the order to manufacture JSAT-32, updating the GEO-side infrastructure in terms of reliability, capacity, and lifespan. Planet Labs is a partner for the LEO-side imaging constellation (Pelican), ensuring the 'temporal resolution' for SKY Perfect JSAT to launch its observation data business. By supplementing manufacturing (GEO) and imaging (LEO) with optimal external partners, the company can concentrate its management resources on its own operations and services.

The government's role is to stabilize demand. The Ministry of Defense conducts PFI-type long-term service purchases for X-band satellite communications, resulting in continuous service payments during the operational phase. In the observation field as well, long-term supply contracts for optical satellite data and orders for satellite constellations are progressing, making sales more 'visible.' Such government demand is less susceptible to economic fluctuations and contributes to stable cash flow.

As for the revenue model, the core is a three-dimensional structure that layers (1) broadcasting and communication stocks (existing GEO), (2) long-term contracts with government agencies, (3) observation data sales, and (4) future laser communication relays (transmission layer). The flow of funds follows the order of manufacturing orders (overseas manufacturers) → launch and delivery → start of operations → continuous recording of service payments, with investor evaluations updated at each milestone. Going forward, the focus will be on how 'events' such as the progress of JSAT-32, the demonstration results of Space Compass, and additional announcements of government demand are reflected in the trends of sales, profits, and order backlogs.

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Chapter 5: Focus Here: Risks and Checks

Launch and development delays. The failure to deploy a Quasi-Zenith Satellite on the H3 rocket in December 2025 has left uncertainty in the timeline for Japan's large-scale missions.Satellite delivery and the start of operations depend on the progress of the rocket side, so this could also spill over into the commercialization timing of JSAT-32 and the observation constellation. Additionally, the production system on the manufacturing side also requires close attention. Thales Alenia Space, which is responsible for manufacturing JSAT-32, has reported labor-related disruptions at its European factories, making it a risk whether material procurement and personnel reallocation will proceed as planned.

Dependence on government demand and policy changes. While the depth of long-term contracts, such as image data supply (approx. 9 billion yen) and Ministry of Defense satellite constellation projects, is a stabilizing factor, changes in budget policies and procurement priorities could affect project timing and specifications. The Ministry of Defense continuously operates policy reviews and risk management frameworks, so it is necessary to carefully track annual requirements and allocations.

Currency impact. Projects involving satellite procurement and overseas partners (Thales Alenia Space in Europe, Planet Labs in the US) cannot avoid fluctuations in foreign currency-denominated costs and cash flow. A weak yen puts pressure on increased CAPEX, while a strong yen has the opposite effect, so I want to confirm hedging policies and liquidity on hand (securing reserve funds in preparation for launch failures, etc.).

Events to watch. Categorize and check: (1) Confirmation of new orders and basic agreements for the Ministry of Defense (satellite constellation projects), (2) publication of results from laser communication (GEO optical communication) demonstrations (Space Compass), and (3) launch and delivery milestones (JSAT-32, new LEO units). Order backlog and operational prospects will be updated for each event.

Operational indicators. In the satellite communications industry, transponder utilization rates (Fill Rate) and order backlogs serve as leading indicators of operational status and future sales. Tracking trends in orders and operations from quarterly IR materials along with segment-specific profit forecasts is practical.

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