Summary of the Conference Call on Hangya Technology Company Overview - **Company**: Hangya Technology - **Industry**: Aviation and Aerospace Key Points 1. **C919 Certification Progress**: The C919 large passenger aircraft has achieved a significant milestone in its international airworthiness certification process, receiving a core evaluation of "good performance and safety reliability" from the European Union Aviation Safety Agency (EASA), marking a decisive step towards entering the global mainstream aviation market [1] 2. **Demand for Wide-body Aircraft**: There is a strong demand for wide-body aircraft globally, with Airbus expected to reach a peak backlog of 1,124 wide-body aircraft orders by 2025, reflecting a recovery in the long-haul market. This surge in demand necessitates enhanced delivery capabilities from engine manufacturers like Rolls-Royce and GE, which will also create additional opportunities for domestic supply chains [1][1] 3. **New Engine Repair Facility**: Rolls-Royce has opened its first joint venture engine repair company in mainland China, Beijing Aviation Engine Services Limited (BAESL), which is set to begin operations and plans to undertake major repairs for several engine models starting in 2026, with an expected annual overhaul capacity of 250 engines by 2034 [1][1] 4. **Specialized Manufacturing Capability**: Hangya Technology is one of the few domestic companies capable of mass-producing compressor blades using precision forging technology, supplying to leading international engine manufacturers. Their products are utilized in Boeing's B737max, B777, B787, B777X, and Airbus's A320neo, A350 [1][1] 5. **Increased Demand from C919**: The domestic C919 aircraft is anticipated to further stimulate demand for domestic commercial engines, indicating that the company is entering a new phase of growth [1][1] Additional Important Information - **Risks**: The company faces several risks, including macroeconomic fluctuations, risks associated with new product development, potential declines in product sales prices, high customer concentration risks, safety production management risks, and fluctuations in receivables influenced by product acceptance schedules [1][1][1]

Core Insights - The Beijing Aircraft Engine Maintenance Project has officially opened, marking a significant breakthrough in China's high-end aircraft engine maintenance sector [1][2] - The project is a joint venture between China International Airlines and Rolls-Royce, with each holding a 50% stake, filling a gap in high-thrust engine maintenance capabilities in mainland China [1][2] - The establishment of Beijing Aircraft Engine Maintenance Co., Ltd. (BAESL) enhances the self-repair capabilities and safety levels of the civil aviation industry in China [1] Company Overview - BAESL has received formal maintenance certification from the Civil Aviation Administration of China, enabling it to conduct deep maintenance on engines [2] - The company plans to gradually undertake major repairs for various Rolls-Royce engines starting in 2026, aiming to reach an annual capacity of 250 engine overhauls by 2034 [2] Industry Context - The Capital Airport Economic Zone is a leader in domestic airport economic development, housing over 240 aviation service enterprises, and forming the largest aviation service industry cluster in China [2] - The economic zone has seen a revenue increase of 6.5% year-on-year, with significant contributions from the aviation maintenance sector, which generates an annual industrial output value of 14 billion yuan, accounting for nearly 20% of the national total [2][3] - The launch of BAESL is expected to enhance the regional aviation industry's competitiveness and inject new momentum into the development of high-end aviation services in China [3]

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 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 Viewpoint - The opening of the Beijing Aircraft Engine Maintenance Project marks a significant advancement in China's aviation maintenance capabilities, particularly in high-thrust engine repairs, enhancing the safety and self-repair capacity of the civil aviation industry in China [1][2]. Company Summary - Beijing Aircraft Engine Maintenance Co., Ltd. (BAESL) is a joint venture established by Air China and Rolls-Royce, with each holding a 50% stake. This partnership aims to provide reliable and efficient maintenance support for Air China's fleet and aligns with Rolls-Royce's strategic goal of increasing global maintenance capacity by 2030 [2][3]. - BAESL has received formal maintenance certification from the Civil Aviation Administration of China, allowing it to conduct in-depth engine repairs and ensuring high-quality service for its clients [2][3]. Industry Summary - The project is part of the broader development of the Capital Airport Economic Zone, which has established a modern aviation service industry system supported by various sectors, including healthcare, logistics, and business consumption. The zone hosts over 240 aviation service enterprises, making it the largest aviation service industry cluster in China [3][4]. - The establishment of BAESL is expected to enhance the regional aviation industry's competitiveness and contribute to the growth of high-end aviation services in China, promoting high-quality development of the airport economy [4][5].

Group 1 - The Beijing Aircraft Engine Maintenance Project has been completed, covering an area of nearly 60,000 square meters, and is expected to begin maintenance on its first aircraft engine by the end of the year, promoting high-level aviation maintenance, high-end manufacturing, aviation services, and technological research and development in the capital airport's economic zone [1] - The project is a joint investment by Air China and Rolls-Royce, featuring facilities such as the main overhaul workshop, test cell, oil pump room, and storage [1] - The total investment for the project is approximately 2.242 billion yuan, with the capacity to support up to 250 engines for maintenance annually and an expected workforce of 800, providing world-class maintenance, repair, and overhaul services for various Rolls-Royce engine models [1] Group 2 - The project is currently in the final preparation stage for production, with top-tier maintenance and testing equipment set to be installed, and technical and production teams preparing for in-depth training and process rehearsals [1] - The project aims to obtain CAAC/EASA airworthiness maintenance certification by the end of the year, with the first aircraft engine maintenance expected to commence at that time [1] - The Beijing Aircraft Engine Maintenance Project will effectively fill the gap in the maintenance of Rolls-Royce Trent series engines in mainland China [2]