Russia Visits Piesat, Secretive Foreign Contract Awarded
The struggling remote sensing company may have just been saved.
This article discusses a large recent contract and a select stock. I am not a financial advisor, and this article is not investment advice; consult a financial advisor before investing.
Piesat Information Technology Co Ltd (航天宏图信息技术股份有限公司), a remote sensing and image processing firm, has been awarded a 990 million Yuan (approximately 138.8 United States Dollars, as of August 30th) contract from an unknown non-Chinese customer on August 29th.
Details on the contract as well as the foreign customer were not revealed, other than that it will have Piesat provide a satellite and ground systems, with an expiration in December 2028 if agreed-upon items are not provided. According to relevant filings, the contract covers “trade secrets”, so extra information is not likely to be shared any time soon.
Piesat’s nearly billion Yuan contract comes after 290 million (40.66 million United States Dollars) in revenue during the first half of the year, representing a 65.6 percent drop from year-on-year, and a net loss of 248 million as well. Previously, a loss of 1.4 billion Yuan (196.3 million United States Dollars) was reported for 2024. Despite that, the new contract has resulted in a large rally of the company’s stock following a near-continuous decline since an April 2023 peak.
In recent months, Piesat has reportedly not paid some employees since February, with some paid about forty percent of their salary since 2024, with several employees are taking the company to arbitration. Alongside that, the company has been revealed to have outstanding bills in the tens of millions of Yuan. Meanwhile, the company’s Deputy General Manager Li Jisheng (李济生) resigned on August 28th.
At the moment, Piesat is operating a fleet of twelve remote sensing satellites in sun-synchronous orbit, with its most recent additions having been launched in November and December 2024, as part of a planned constellation of sixteen. A fourth launch has been continually pushed back from an initial March target through May, August, and now October. Oddly, a launch with Galactic Energy’s soon-to-debut Ceres-2 rocket has been booked for December as well.
Just before the new contract, a Russian delegation led by Minister of Industry and Trade Anton Alikhanov coincidentally visited the company on August 26th, where they were met by Wang Yuxiang (王宇翔), Chairman of Piesat, and other executives at their Beijing headquarters. During the visit, it was reported that Piesat and the Russian delegation outlined related areas for cooperation and mutual agreements. Furthermore, Anton Alikhanov was said to be impressed by the company’s high-resolution remote sensing satellites, industry application services and software, and unmanned aerial systems.
While the buyer was not confirmed to be Russian, Piesat has previously done business with the country via the sale of commercial drones in 2023. Additionally, military groups in Russia have previously bought Chinese satellite imagery in support of military efforts in the invasion of Ukraine and operations in various parts of Africa. The most well-known previous example is Changguang Satellite Technology Co Ltd (长光卫星技术股份有限公司) selling to the now-disgraced Wagner Group, which resulted in U.S. sanctions.
If Piesat is selling a spacecraft and other advanced technologies to a Russian entity, they will likely be sanctioned by the U.S. and its allies. However, with the company in an increasingly struggling financial situation, not paying employees and bills, the possibility of being sanctioned may be offset by the opportunity to fulfil a large contract with Russia in the short term, as well as possible future ones in the long term, at the expense of little Western business.
Up until weeks before launch, it will probably be unclear whom Piesat’s almost billion Yuan contract is with.