Core Viewpoint - The Beijing Aircraft Engine Maintenance Project has officially opened and commenced operations at the Capital Airport's Tianzhu Comprehensive Bonded Zone, filling a gap in high-thrust aircraft engine maintenance in mainland China and significantly enhancing the self-repair capability and safety level of the civil aviation industry [1] Group 1: Project Overview - The project is operated by Beijing Aircraft Engine Maintenance Co., Ltd. (BAESL), which was jointly established by China International Airlines and Rolls-Royce, with each holding a 50% stake [1] - The Civil Aviation Administration of China has officially issued a maintenance license to BAESL, indicating that the company is now qualified to conduct deep maintenance on engines [1] Group 2: Future Plans - BAESL plans to gradually undertake major repairs for several engine models, including the Trent 700, Trent XWB-84, and Trent 1000, starting in 2026 [1] - The company aims to steadily expand its capacity with a target of completing 250 engine overhauls annually by 2034 [1]

Core Points - Rolls-Royce has established the Beijing Aircraft Engine Services Limited (BAESL), marking a significant advancement in Sino-British cooperation in high-end aircraft engine maintenance [1][2] - BAESL is a joint venture between China International Airlines and Rolls-Royce, with each holding a 50% stake [2] - The facility covers approximately 59,000 square meters and is equipped with advanced maintenance technology, including leading-edge CNC grinding and fluorescent detection equipment [2] Company Overview - BAESL aims to start overhauling the Trent 700 engine by 2026, with an initial target of servicing 8 engines in the first year [4] - By 2034, BAESL plans to achieve an annual overhaul capacity of 250 engines, creating 800 to 1,000 high-end technical jobs in the local area [4] - Rolls-Royce currently provides power for over 500 commercial aircraft in China, with the Trent series engines accounting for about 20% of global deliveries [2] Industry Context - The establishment of BAESL is seen as a response to the growing demand for reliable and efficient maintenance support for aircraft fleets in China [2][4] - The local government's supportive business environment has been a crucial factor in the rapid establishment of BAESL, which took only three years from planning to opening [4] - The partnership between China International Airlines and Rolls-Royce was formalized in a cooperation agreement signed in 2022 [4]

Core Viewpoint - Beijing Aviation Engine Services Limited (BAESL), the first joint venture engine maintenance company in mainland China, officially opened on December 10, 2023, in the Capital Airport Economic Zone, marking a significant step in enhancing the aircraft maintenance industry chain in China [1] Group 1: Company Overview - BAESL is jointly funded by Air China and Rolls-Royce, with each holding a 50% stake, serving as the operational entity for the Beijing aviation engine maintenance project [1] - Rolls-Royce is a leading global manufacturer of aircraft engines, with its Trent series engines widely used in the global wide-body fleet, accounting for approximately 20% of the total global deliveries in China [1] Group 2: Future Plans and Capacity - Starting in 2026, BAESL plans to gradually undertake major repairs for several engine models, including the Trent 700, Trent XWB-84, and Trent 1000, with a goal to steadily expand its capacity [1] - By 2034, BAESL aims to achieve an annual overhaul capacity of 250 engines, which will create between 800 to 1,000 high-end technical jobs [1] Group 3: Regulatory Approval - The Civil Aviation Administration of China (CAAC) North China Regional Administration awarded BAESL a maintenance license (CCAR-145) during the opening ceremony [1]

Core Insights - The collaboration between Xanadu, Rolls-Royce, and Riverlane has successfully advanced quantum computing applications for modeling jet engine airflow, significantly reducing simulation runtimes from weeks to under an hour, thus enabling new prototyping opportunities in the aerospace industry [1][5] Company Summaries Xanadu - Xanadu is a Canadian quantum computing company founded in 2016, focused on building practical quantum computers and developing the open-source software library PennyLane [7] - The company has successfully reduced prototyping runtimes by up to 1000-fold for Rolls-Royce, addressing the long wait times associated with traditional simulations [4] - Xanadu's Catalyst compiler was instrumental in optimizing quantum-classical programs for Rolls-Royce, emphasizing the importance of hybrid quantum-classical computing [4][5] Rolls-Royce - Rolls-Royce is a major player in the aerospace industry, providing power solutions and services across multiple sectors, including defense and civil aviation [9][10] - The company reported an annual underlying revenue of £17.8 billion and an underlying operating profit of £2.46 billion in 2024, indicating strong financial performance [11] - Rolls-Royce's collaboration with Xanadu and Riverlane is part of its strategy to leverage advanced technologies to enhance its design processes and product offerings [3][5] Riverlane - Riverlane specializes in Quantum Error Correction (QEC) and partners with over 60% of the world's quantum computer companies to address challenges in achieving utility-scale quantum systems [12] - The company contributed novel quantum algorithms to the collaboration, enhancing the overall efficiency of the simulation workflow for Rolls-Royce [4][5] - Riverlane's expertise in QEC is crucial for unlocking the potential of quantum computing in various industries, including aerospace [12]

Core Insights - The company is experiencing strong demand across all its businesses, indicating it is on track to meet its full-year targets [1] Summary by Categories - **Business Performance** - Strong demand is reported across all business segments, suggesting robust operational performance [1]

Core Insights - The global aviation industry is experiencing growth driven by increased aircraft deliveries, expanding airline fleets, and rising demand for fuel-efficient jet engines [1][3] - Rolls-Royce and Boeing are leading players in the aerospace sector, focusing on propulsion technologies, sustainable aviation, and aftermarket services [1][2] Company Overview: Rolls-Royce - Rolls-Royce is transforming to enhance efficiency and develop hybrid-electric propulsion systems [2] - The company reported a 17% year-over-year increase in sales from its Civil Aerospace segment in the first half of 2025 [6] - Rolls-Royce ended June 2025 with cash and cash equivalents of approximately $7.95 billion and gross debt of $4.64 billion, indicating a solid solvency position [4] Company Overview: Boeing - Boeing is advancing its leadership through innovations in aircraft design, engineering, and maintenance solutions [2] - The Boeing Commercial Airplanes division reported a 63% year-over-year rise in revenues for the second quarter of 2025 [6] - As of June 30, 2025, Boeing had cash and cash equivalents of $22.97 billion, with long-term debt totaling $44.60 billion [5] Growth Drivers - The recovery in global air passenger traffic has fueled demand for jet engines and related services, benefiting both companies [6] - Rising global demand for defense equipment has also supported revenue growth, with Rolls-Royce reporting a 1% increase in defense revenues and Boeing's defense segment seeing a 10% rise [7] Competitive Positioning - Rolls-Royce benefits from a strong position in widebody aircraft engines and a diversified portfolio, including marine propulsion technologies [8] - Boeing holds a dominant position in the global commercial aircraft market, excelling in advanced aerostructures and digital flight systems [8] Financial Performance and Estimates - The Zacks Consensus Estimate for Rolls-Royce's 2025 sales and EPS implies improvements of 27.8% and 50%, respectively [13] - Boeing's 2025 sales estimate suggests a year-over-year growth of 29.5, but its near-term estimates have declined over the past 60 days [14] Stock Performance - Rolls-Royce has outperformed Boeing over the past year, with a stock increase of 105.8% compared to Boeing's 38.8% [16] - Rolls-Royce is trading at a premium with a forward price/sales ratio of 4.49X, while Boeing's is 1.80X [17] Final Assessment - Both companies are well-positioned for long-term growth in the aerospace industry, but Rolls-Royce appears better positioned for stronger performance in 2025 [19][20] - Rolls-Royce's focus on widebody aircraft engines and sustainable technologies enhances its growth prospects, while Boeing faces challenges related to supply-chain disruptions [20][21]

Core Insights - Rolls-Royce is accelerating efforts to attract younger consumers through regular live streaming events at dealerships, which focus on brand presentation rather than direct sales links, yet still manage to generate orders [1][2] - The luxury automotive market is under pressure, with a nearly 50% year-on-year decline in sales in the ultra-luxury segment in China during the first half of 2025, prompting brands like Rolls-Royce to seek new growth avenues [1][4] Group 1: Marketing Strategy - Multiple dealerships of Rolls-Royce have initiated regular live streaming, with the Shanghai dealership increasing its frequency to daily broadcasts since August [2] - The average age of Rolls-Royce customers has decreased, with the current average being 36 years old, and 40% of buyers of the new Ghost model being first-time Rolls-Royce purchasers [2][3] - The brand is attempting to maintain its "quiet luxury" ethos during live streams, which contrasts with typical aggressive sales tactics [2] Group 2: Product Development - Rolls-Royce is introducing sportier models and design elements that appeal to younger aesthetics, such as the 2025 Black Badge versions of the Phantom and Cullinan, which incorporate carbon fiber and sporty features [3] - The limited edition models, like the Dunhuang mural version of the new Ghost, are designed to resonate more with younger consumers [3] Group 3: Market Challenges - The ultra-luxury automotive market is experiencing a significant decline, with sales dropping to 37,000 units in the first half of 2025, a 49% decrease year-on-year [4] - Despite facing sales challenges, Rolls-Royce's performance has shown signs of recovery, with a global sales figure of 5,712 units in 2024, a 5.3% decline, but a 3.3% increase in the first three quarters of 2025 [4] Group 4: Risks of New Strategies - The shift to live streaming is seen as a double-edged sword, potentially diluting the brand's high-end image while reaching younger consumers [7][8] - Experts warn that while live streaming can attract younger buyers, it may alienate the core older clientele and diminish the brand's perceived exclusivity [7][8]

Core Viewpoint - Rolls-Royce is accelerating efforts to attract younger consumers through regular live streaming events, despite the potential risk of diluting its luxury brand image in a challenging ultra-luxury car market [1][11][12] Group 1: Marketing Strategy - Multiple Rolls-Royce dealerships have initiated regular live streaming sessions, focusing on brand presentation rather than direct sales links, which has led to several orders being placed [1][2][4] - The average age of Rolls-Royce customers has decreased significantly, with the average age of buyers for the new Ghost model being around 35 years [4][5] - The brand is also introducing sportier models and design elements that appeal to younger aesthetics, such as the 2025 Black Badge versions of the Phantom and Cullinan [5][6] Group 2: Market Challenges - The ultra-luxury car market in China is under pressure, with sales dropping nearly 50% year-on-year in the first half of 2025, leading to a need for brands like Rolls-Royce to target younger consumers [6][9] - Despite a decline in sales, Rolls-Royce's global sales showed signs of recovery in 2025, with a 3.3% increase in the first three quarters compared to the previous year [6][9] - The brand's transition to electric vehicles is ongoing, with plans for full electrification by 2030, but sales of electric models are facing challenges [7][9] Group 3: Brand Image and Consumer Perception - The shift to live streaming reflects the increasing sales pressure on ultra-luxury brands, which may risk alienating their core older clientele while trying to engage younger consumers [11][12] - Experts suggest that while live streaming can enhance brand visibility among younger affluent consumers, it may also lead to a decrease in brand prestige and consumer trust in the long term [11][12]

transformation. What we were looking to do is really taking a company from point A to point B. In point B, that company is so different that it can do stuff that it couldn't do at point A.Whether it is capability, whether it is balance sheet strength, where it is mindset and culture, it is a very different company. So that is to me transformation. [Music] Tufan, you have an amazing story to tell and I want to get into the story in a minute.But first of all, you also have some news. Uh you have just been awa ...

Core Insights - The growth in global air travel and rising defense spending are driving demand for advanced jet engines, benefiting Rolls-Royce Holdings plc (RYCEY) [1] - RYCEY's Trent family of engines plays a major role in widebody aircraft programs, particularly in the commercial aviation sector [1][9] Commercial Segment - RYCEY's Trent XWB powers the Airbus A350, recognized as one of the most efficient widebody aircraft [2] - Airlines are investing in fuel-efficient engines to modernize their fleets and lower operating costs, leading to strong demand for RYCEY's Trent 1000 and Trent 7000 engines [2] - The Civil Aerospace business delivered double-digit revenue growth in the first half of 2025, supported by a large order backlog of over 2,000 engines in the widebody segment as of July 2025 [3][9] Defense Segment - Rolls-Royce manufactures engines for military aircraft, including the EJ200 for the Eurofighter Typhoon and engines for the C-130J Super Hercules and V-22 Osprey [4] - Increased geopolitical tensions and rising European defense spending are expected to sustain demand for these defense engines in the long term [4] Strategic Partnerships - In September 2025, Rolls-Royce expanded its partnership with Avio Aero and IHI to develop next-generation fighter engines under the Global Combat Air Programme, highlighting its role in future combat air propulsion technology [5] Industry Comparisons - Other jet engine manufacturers like GE Aerospace and RTX Corporation are also experiencing solid order flows due to the same demand trends [6] - GE Aerospace signed an extended services agreement with Silk Way West Airlines for various Boeing aircraft [6] - RTX secured contracts totaling $730.2 million for the F135 propulsion system supporting the F-35 Joint Strike Fighter program [7] Stock Performance - RYCEY shares have surged 124.5% over the past year, outperforming the industry's growth of 36.6% [8] - The company's shares are trading at a relative discount, with a forward 12-month Price/Earnings ratio of 36.51X compared to the industry's average of 48.05X [10] - The Zacks Consensus Estimate for RYCEY's earnings for 2025 and 2026 has improved over the past 60 days [11]