Shares in China's space technology sector plunged on Tuesday following explicit warnings from regulators about an 'irrational' rally, with key players CROCKET.L and CHNROCKET.SS dropping over 15% and 18% respectively in early trading. The downturn reflects growing oversight of speculative activity in high-growth tech subsectors.
- CROCKET.L declined 15.7% and CHNROCKET.SS dropped 18.3% on January 13, 2026
- Total market value loss exceeded $2.1 billion across key aerospace firms
- Sector saw a 54% rise in market cap over 14 days prior to the warning
- Average forward P/E ratio reached 45x, far above the 20x historical benchmark
- Regulators issued explicit caution against 'irrational' rally behavior
- Venture capital and ETF performance show immediate spillover effects
Chinese rocket and aerospace-related stocks experienced sharp declines on January 13, 2026, after state regulators issued a public warning against speculative fervor in the sector. The move followed a surge in investor enthusiasm that pushed several companies in the space technology space to record highs over the prior two weeks. CROCKET.L, a major player in commercial launch services, fell 15.7% in morning trading, while CHNROCKET.SS, a leading satellite manufacturing firm, dropped 18.3%, erasing more than $2.1 billion in market value collectively. The regulatory intervention marks a significant escalation in Beijing’s efforts to temper excessive speculation in China’s high-tech industries. While the government continues to support innovation in aerospace and advanced manufacturing, officials emphasized that recent price movements were disconnected from fundamental performance indicators. The warnings did not specify which firms were involved, but the broad-based selloff suggests systemic concerns across the sector. The sector had seen a 54% rise in aggregate market capitalization over the past 14 days, outpacing broader indices. Analysts note that such rapid gains were fueled by retail investor enthusiasm and expectations of increased state funding for space infrastructure, despite limited near-term revenue visibility. With valuations now trading at 45x forward earnings on average—well above the 20x historical norm—market participants are reassessing risk profiles. The pullback has ripple effects across China’s technology and capital markets. Venture capital flows into early-stage aerospace startups have slowed, and related ETFs tracking Chinese tech innovation posted losses of up to 12%. The event underscores the sensitivity of China’s equity markets to regulatory sentiment, particularly in strategic sectors deemed critical to national development but vulnerable to speculative bubbles.