Magnate Technology Co., Ltd. Company Profile and Industry

Magnate Technology Co., Ltd.

May 2019

11 Beiling 2nd Rd, Lujhu, Kaohsiung, Taiwan 821

TEL: +886-7-695-5331

FAX: +886-7-695-5332

E-mail: [email protected]

WEB: http://www.maicl.com

Company Profile and Industry Update

Proprietary Information

1. Global Aerospace Industry Overview1.1 Aerospace Industry Overview

1.2 Commercial Aircrafts

1.3 Commercial Aeroengines

2. Company Update2.1 Major Products

2.2 Quality System and Special Process Accreditation

2.3 Business Development

CONTENT


1. Global Aerospace Industry Overview

1.1 Aerospace Industry Overview

1.2 Commercial Aircrafts

1.3 Commercial Aeroengines

Glo

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Five Categories of Aircraft

Source：ICF Analysis

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Civil Aircraft Makes Up 78% Market

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Source: ICF Analysis

RW = Rotary Wing

BGA = Business & General Aviation

22%


Market Value by Aircraft Sector

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Boeing & Airbus Makes Up 94.6% Market

Aero

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4)C

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RPK值年成⻑率約4.7%

RPK CAGR 5.8% in Developing Country

Revenue Passenger-kilometers (RPK) CAGR 4.4%

8

*Source : Airbus Global Market Forecast 2018-2037

**RPK = Revenue Passenger-kilometers

Aero

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RPK Doubles Every 15 Years

*Source: Airbus Global Market Forecast 2018-2037

**RPK = Revenue Passenger-kilometers

RPK has doubled in 15 years since 911 WTC Attack

Aerospace industry proven resilient, recovering from impacts

9

Aero

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Total Aircraft to Reach 48,540 by 2037

* Source: Boeing Current Market Outlook 2018

By 2037, new delivery fleet of 42,730

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Total Market Value to Reach $ 6.3 Trillion

*Source: Boeing Current Market Outlook 2018

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Boeing & Airbus Backlog Exceeds 7 yrs

Company Boeing Airbus

2019 Q1 Unfilled Order 5,605 7,357

Est. backlog delivery by production rate 6.95 yr 9.47 yr

Deliveries through March 2019 -- 162

Aero

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51

0

53

4

58

8

62

6

62

7

63

5

68

8

71

8

80

0

46

2

47

7

60

1

64

8

72

3

76

2

74

8

76

3

80

6

0

100

200

300

400

500

600

700

800

2010 2011 2012 2013 2014 2015 2016 2017 2018

Nu

mb

er

of

Jets

Annual Jet Delivery

Airbus

Boeing


Aircraft Order Trend Coincides with Oil Price

Company Boeing Airbus

2018 Net Order 893 831

Aero

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dustry

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10/

12)C

ivil A

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4)C

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4)

57

4

14

19

83

3

15

03

14

56

10

80

73

1

11

90

83

1

53

0

80

5

12

03

13

55

14

32

76

8 66

8

10

22 89

3

0

200

400

600

800

1000

1200

1400

1600

2010 2011 2012 2013 2014 2015 2016 2017 2018

Nu

mb

er

of

Ord

er

Annual Net Order

Airbus

Boeing

Bre

nt

Cru

de O

il P

rice


Single Aisle Aircraft Backlog is Long

Company A320neo 737 MAX

2018 Net Order 694 531

2018 Unfilled Order 4,675 5,891

2018 Delivery 226 386

Aero

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30

12

27

47

8

72

8

10

09

88

7 71

1

92

5

53

1

0

15

0

90

8 70

8

89

0

40

9

54

1

70

0

69

4

0

200

400

600

800

1000

1200

1400

2010 2011 2012 2013 2014 2015 2016 2017 2018

Nu

mb

er

of

Jets

Annual Net Order

A320neo

737 Max


Competition Benefits the Market

Aero

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4)C

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Boeing & Airbus Market Coverage

Aero

space In

dustry

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12)C

ivil A

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4)C

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4)

TWIN/WIDE BODY

SINGLE AISLE/NARROW BODY


A220

Common Models of Civil Aircraft

Narrow-Body Wide-Body

Aero

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12)C

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Boeing Model Development Timeline

Magnate Enters Aerospace Market

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Airbus Model Development Timeline

Magnate Enters Aerospace Market

Aero

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Aeroengines with Life Cycle > 30 yrs

*Source:

Fightglobal, “Commercial engines 2016”

1982 CFM56

2016 LEAP

Aero

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CFM56: Previous SA Aeroengine

1974 First test-flight

1984 First Boeing 737 with CFM56 launched

1988 First Airbus A320 with CFM56 launched

21,516 CFM56 engines in service as of 2017

1,450 New orders of CFM56 engines as of 2017

* Update until 2017

Aero

space In

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LEAP, Leading Edge Aviation Propulsion

2005 Announced in Paris Airshow, 16% more fuel efficiency

2010 selected as Airbus A320neo engine

2011 selected as Boeing 737max only engine

Backlog order 7,526 (as of 2017)

2015 May First flight of A320neo with LEAP-1A

2016 July First A320neo with LEAP-1A delivered (Pegasus Airlines, Turkey)

2017 March 737Max approved by FAA and EASA

2017 May First 737Max with LEAP-1B delivered (Malindo Air, Malaysia)

2017 May First flight of 737Max (Kuala Lumpur to Singapore)

LEAP: New Generation SA Aeroengine

Aero

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SA Aeroengine Watershed in 2018

Type Company Previous New Generation

AircraftAirbus A320ceo (1988) A320neo (2016)

50%+ share

Boeing 737 NG (1984) 737 MAX (2017)100%

Aeroengine CFM (GE/Safran) CFM56 LEAP

Delivery 32,645 825

Backlog 1,085 14,470

Estimated LEAP delivery in 2019: 1,800

Estimated LEAP delivery in 2020: >2,000

CFM LEAP 2018 unfilled order: 17,275

*Source: Aviation Daily, “CFM Reaches Watershed As Leap Deliveries Overtake CFM56”, Jun 15, 2018

Aero

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2.1 Major Products

2.2 Quality System and Special Process Accreditation

2.3 Business Development

2. Company Update

Glo

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Aerospace Product Application

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• Heat-Resistant Casing/ Ring

• Accessory Drive Train Components

• Turbine Nozzle/ Hanger /Shroud

Landing Gears

300M, 15-5PH, Aluminum, Titanium

Engine Components

Actuation System

15-5PH & Ti-based alloy

Engine Mount/ Yoke/ Link

Ti 6-4, Inconel 718, TA6V

• Torque Link

• Main Fitting

• Side Stay

• Spoiler

• Aileron

• Cylinder/Tailstock


Aeroengine Product Application

Turbine Nozzle/ Hanger

René 77

Accessory Drive Train

Aluminum alloy

• Compressor Case

• Combustor Case

• Turbine Case/Ring

• AGB/TGB

• Gearbox, housing

• Turbine Nozzle

• Hanger/Segment/Shroud

Figure adapted from CFM56

Core Module Casing

M152, Ti 6-4, Inconel

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CFM56 Comp Rear Case

MTL: Inconel 909

Engine Components-- Engine Casing

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GE CF34 Comp Case

MTL: M152

LEAP HPC Extension Case

MTL: Inconel 718

CFM56 Turb Pressure Vessel

MTL: Inconel 718

• LEAP-1A, LEAP-1B

• CFM56

• CT-7

• CF 34

• V2500

LEAP HPC FWD Case

MTL: M152


Engine Components-- Turbine Nozzle/ Hanger

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MTL : René 77

• LEAP-1A, LEAP-1B

• CFM56

• GE 90

• GEnx

• CF 34

• GP7200


Landing Gears

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• A350, A320/321

• CRJ700/900/1000

• MRJ, Honda Jet

• Challenger 300

Landing Gears

MTL: 300M, Aluminum, 15-5PH, Titanium


Inboard

Spoiler Elevator

Rudder

Aileron

Link Match Sets Link Kick Family Trunnion Family Trunnion Ring Family Cylinder/Tailstock

MATL : 15-5PH &

Ti-based alloy

Actuation System

• Boeing 787

• Embraer E2

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CF 34 Yoke

MTL: Ti 6-4

SaM146 Engine Mount

Assembly

MTL: Inconel 718 & Ti 6-4

CF 6 Mount

MTL: Ti 6-4

CF 6 Links

MTL: Ti 6-4

CF 6 Yoke

MTL: Inconel 718

Engine Mount/ Yoke/ Link

• SaM146

• CF 34

• CF 6

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TGB**

AGB*

Aluminium

Housing* AGB: Accessory Gear-Box

** TGB: Transfer Gearbox

Accessory Drive Train

• CFM56

Aluminium Precision Parts

MRJ Jig

• MRJ

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End CustomerProduct Engine Aircraft Type Client End Customer

Engine

Components

LEAP Boeing 737 MAX,

Airbus A320neo Family

SA AIDC GE Aviation (CFM)

CFM56 Boeing 737NG

Airbus A320ceo Family

SA AIDC

AvioCast

GE Aviation (CFM)

STS

V2500 Airbus A320ceo Family、MD90 SA AIDC Rolls-Royce (IAE)

GE90 Boeing 777 WB AIDC GE Aviation

GEnx Boeing 787, 747-8 WB AIDC GE Aviation

SAM146 Sukhoi Superjet 100 RJ S. Nacelles Safran Nacelles

GP7200 Airbus A380 LWB AIDC Pratt & Whitney

CF34 Bombardier Challenger, CRJ

Embraer E-Jet, Comac ARJ

RJ AIDC GE Aviation

BR710 Gulfstream V, Gulfstream G550

Bombardier Global Express

Business AIDC Rolls-Royce

Trent XWB Airbus A350 WB AIDC Rolls-Royce

Landing Gears -- Bombardier Challenge, CRJ,

Honda Jet

RJ,

Business

SPP Bombardier

-- Airbus A350 WB SLS Airbus

Actuator -- Boeing 787, Embraer E2 TA MOOG Boeing、Embraer

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2019 Revenue by Application

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LEAP 52%

Genx

11.8%A350

8.5%

B787

5.7%

PP20

4.1%

CFM56

2.8%CF34

2.0%

GE90

1.4%

SAM146

1.4%Challenger 300

1.3%

Others

8.6%


2018 Revenue Allocation

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Top 10 Clients

AIDC

EXXXX

MOOG

Safran LS

MHI

AGSE

SPP

JSW

Safran Nacelles

FUJI

AIDC

38.2%

EXXXX

19.5%

MOOG

7.0%

SLS

6.4%MHI

6.1%AGSE

4.0%

SPP

3.8%

JSW

2.6%

Safran

Nacelles

2.1%

FUJI

1.8%

Aviocast

1.7%

Others

6.8%

Aerospace 65%Industrial Precision 35%


Standard License No. Certification Body

ISO 9001:2015 QMS41042 SAI Global

AS9100D AERO40052 SAI Global

OHSAS 18001:2007 TW16/01155 SGS

Management System Certification

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Special Process Accreditation

Special Process SN SLS SPP MOOGNab

tescoNGC GEAE MHI HJ

Nondestructive

Testing (NDT)

FPI • • • •

MPI • • •

Chemical Processing

(CP)

Acid Etching •

Passivation • • • • •

Heat Treating (HT) Heat Treating • • •

Conventional

Machining (CM)Hole Making •

Nonconventional

Machining (NM)EDM •

Surface Enhancement

(SE)Shot Peening • • • • •

Nadcap

•

•

•

•

•

•

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SPECIAL PROCESS

Non-Destructive Testing (NDT-FPI/MPI)

Chemical Processing (Acid Etching/Passivation/

Cadmium brush plating/Painting)

Heat Treatment/Material lab

Hole-making

Electrical Discharge Machining (EDM)

Shot Peening

Shot Peening EDM

MPI

FPI

Passivation

Holemaking

Heat Treatment

AEINEI

Cadmium

brush platingMaterial lab

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Special Process In Development

Progress Scope Process

Developed

Nondestructive Testing (NDT) MPI Coil Add Clam Shell Coil

Chemical Processing (CP)Macrostructure Etching Add Nital

Painting

Heat Treating (HT) Vacuum, Air Add Oil Quenching

Surface Enhancement (SE) Shot Peening Ti Add 300M

Developing

Chemical Processing (CP) Zn-Ni Plating

Coatings Thermal Spray (Plasma Coating)

Heat Treating (HT) Brazing

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Airbus A350/A320 Landing Gears

2014 LTA signed with SLS on A350 Landing Gears

Whole-process mass production of Titanium components

2016, 2017 & 2018 Supplier Excellence Award, 3 consecutive years

Whole-process of 300M Steel components development since 2017

Special Process facility established in October 2018

2018 Q4 FAI approval of A350 Steel component

2019 Q2 to acquire client special process approval of Steel components

New order of A320 Steel components, 2019/E to pass FAI

Pro

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LEAP: New Generation SA Aeroengine

Supplier of CFM LEAP components through AIDC (end customer GEAE)

Including engine case and turbine hanger

Mass production approved in 2017 Q2

Ramp up production 2018-2020

For both LEAP-1A/C & LEAP-1B

LEAP-1A for 50%+ A320neo

LEAP-1B exclusively for 737 MAX

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Boeing & Airbus Aircraft Delivery

Airbus planned 100% switch to A320neo production in 2020. Monthly production

rate target– 60 by 2018 end, and 70 by 2021

737 MAX production transition is about 1 year behind A320neo

LEAP-1A/C and 1B components are similar but incompatible

Model 737NG+737MAX A320ceo+A320neo

New Model Ratio, 2018 Delivery 38.96% 61.66%

2018 Monthly Production Rate 48.33 52.17

Component Demand Increase Beginning 2018 Q3 Beginning 2017 Q4

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354

27145

48 6

226

0

100

200

300

400

500

600

700

B737 B767 B787 B777 B747

Boeing 2018 Delivery

737NG 737 MAX

240

20 49 9312

386

0

100

200

300

400

500

600

700

A320 A220 A330 A350 A380

Airbus 2018 Delivery

A320ceo A320neo


737MAX Incident Analysis

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43

Source: https://www.nytimes.com/interactive/2019/03/29/business/boeing-737-max-8-flaws.html

Angle of Attack (AOA) and stall



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Source: https://www.nytimes.com/interactive/2019/03/29/business/boeing-737-max-8-flaws.html

737MAX new feature of Maneuvering

Characteristics Augmentation System (MCAS)

Connected with stall alarm and actuation systems

Set to “Off” during auto pilot mode

Defined as automatic safety protocol during take-off

Designed for 737NG pilot experience mimic



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Source: https://www.boeing.com/commercial/737max/737-max-software-updates.page

MCAS Software Update:

(Below description taken directly from Boeing Website)

Flight control system will now compare inputs from both AOA

sensors. If the sensors disagree by 5.5 degrees or more with the

flaps retracted, MCAS will not activate. An indicator on the flight

deck display will alert the pilots.

If MCAS is activated in non-normal conditions, it will only

provide one input for each elevated AOA event. There are no

known or envisioned failure conditions where MCAS will provide

multiple inputs.

MCAS can never command more stabilizer input than can be

counteracted by the flight crew pulling back on the column. The

pilots will continue to always have the ability to override MCAS

and manually control the airplane.



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On 2019/04/29, the FAA has convened the Joint Authorities Technical Review (JATR),

which is expected to last 3 months

“We expect the JATR to engage in a free and candid discussion that exchanges

information and improves future processes. Their work is not a prerequisite for the 737

MAX to return to service. The FAA will continue to share its technical experience and

knowledge to support the international aviation community and, specifically over the

next three months, the JATR participants.”—FAA Website

Authorities from 9 other countries have joined JATR

• Australia/ Civil Aviation Safety Authority (CASA)

• Brazil/ Agencia Nacional de Aviação Civil (ANAC)

• Canada/ Transport Canada Civil Aviation (TCCA)

• China/ Civil Aviation Administration of China (CAAC)

• European Union/ European Aviation Safety Agency (EASA)

• Japan/ Japan Civil Aviation Bureau (JCAB)

• Indonesia/ Directorate General of Civil Aviation (DGCA)

• Singapore/ Civil Aviation Authority of Singapore (CAAS)

• United Arab Emirates/ General Civil Aviation Authority (UAE GCAA)

Source: https://www.faa.gov/news/updates/?newsId=93206

Thank you for your attention

+886-7-695-5331

[email protected]

http://www.maicl.com

Documents

Magnate Technology Co., Ltd. Company Profile and Industry