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晟田

No.11, Beiling 2nd Rd., Lujhu Dist., Kaohsiung City 821, Taiwan

TEL: (07) 695-5331 FAX: (07) 695-5332E-mail: magnate@ms1.hinet.netWeb: http://www.maicl.com

Magnate Technology Co., LtdInvestors' Conference

11th and 12th September 2013

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晟田Index

1. Company Overview2. Industry Overview3. Business Overview4. Development Overview5. Financial Overview6. Future Outlook

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晟田1.  Company Overview

1‐1.    Business Philosophy1‐2. History & Milestone1‐3.    Company Organization1‐4. Shareholding Structure

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Innovative Technology:Customer collaboration in product development which increasing the substantial 

production capability. 

Consistent Quality:Compliance in accordance with the Certified International System requirement, 

implementation of operation standardized, routinized and accustomed.

Returning Profit:Continue to deliver significant improvements, cost reduction and profit sharing.

Sustainability: Implementing training and improving personnel quality by enhancing the quantity and 

quality of employee performance for all levels to maintain their competitive advantage.

1‐1.  Business Philosophy

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NADCAP EDM certified.Y2008

New facility in Science Park inaugurated (current address).Y2009

LTA Signed with SPP on commercial aircraft CRJ series Landing Gear manufacturingY2006

AS9100B certified.Y2002

Incorporated with SPP on heat exchanger components used on commercial aircraft.Y2001

NADCAP for NDT‐FPI and holemaking certified.FMS system introduced and vacuum heat treatment equipment implemented.AS9100C certified. Completion of the 2nd phase facility, temperature‐controlled factory introduced .

Y2010Y2011Y2012

ISO9002 certified.Y1999

Introduced ERP and CAD/CAM systems. First entered into Aerospace industry by incorporating with AIDC manufacturing commercial aircraft components.

Y1995

Became a major supplier of MHI for drinking‐filling machinery components and sub‐assembly.Y1992

Insist on integrity and credibility to achieve business goalsInsist on integrity and credibility to achieve business goals

Established in :  Yr 1987Capital :  NTD  0.437BLand area :  46,200 m²Facility area : 37,000 m²No. of employees :  400 +

Milestone

1‐2.  History & Milestone

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Board of Directors

General Manager Office

AdministrationDept.

Manufacturing Dept.

Engineering Dept.Sales Dept.

Audit Office

Financial & Accounting

Dept.HR Dept. R&D Dept. Technical Dept. Aerospace 

Dept.Precision Dept.

Quality Assurance Dept.

Production Control Dept.

Procurement Dept.10

No. of employees: 400+

Security Dept.

1‐3. Company Organization

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natural person56%

CAI Asia Ltd.2%

Sumitomo PrecisionProduct3% Mega Internation

Commercial Bank3%

Hong‐yi InvestmentLtd. 3%

Industrial Bank of TaiwanIBT II Venture Capital Co.

5%

 Zih‐kai InvestmentLtd. 6%First Venture Capital

6%Cheng‐yu Investment Ltd.

7%

China DevelopmentIndustrial Bank

9%

1‐4. Shareholding Structure

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晟田2.  Industry Overview (1/3)

*Source from : Boeing Current Market Outlook 2012/Airbus‐Global Market Forecast 2012‐2031**RPK = Revenue Passenger‐kilometers

Airline passenger annual growing rate for RPK value will increase by 5% for the next 20 years;  air traffic will double in the next 15 years. 

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晟田2.  Industry Overview (2/3)

*Source from: Boeing Current Market Outlook 2012/Airbus‐Global Market Forecast 2012‐2031

New delivery and fleet replacement will be about 34,000 units until Year 2031 (For aircraft with over 100 passengers is about 27,000 airplanes). 

By 2031, 85% will be the new aircrafts.

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晟田2.  Industry Overview (3/3)

*Source from: Boeing Current Market Outlook 2012/Airbus‐Global Market Forecast 2012‐2031

Total market value for new airplanes is USD$4,470B in the next 20 years. Single aisle airplanes (Magnate’s major target) take a total account of 68% (40% of 

market value).

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晟田3.  Business Overview

3‐1.    Main Business Scope3‐2.  Core Product3‐3.  Major Customers3‐4.  Sales Revenue3‐5.  Sales Volume3‐6.     International Certification3‐7.  Competitive Advantages

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晟田3‐1.  Main Business Scope

Aerospace commercial aircraft components and sub‐assembly

Engine Cases

Engine Mounts/Yokes/Links

Turbine Hangers & Nozzles

Aircraft Landing Gears

Gear Box and Heat Exchanger

Industrial precision components and sub‐assembly

Drinking‐Filling machinery components 

and sub‐assembly

Semi‐conductor products

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GE CT‐7 Comp. CaseMaterial: M152

GE CF‐34 Comp. CaseMaterial: M152

CFM‐56 Comp. Front CaseMaterial: M152

CFM‐56 Turbine After CaseMaterial: Inconel 718

CFM‐56 Turbine Pressure VesselMaterial: Inconel 718

CFM‐56 Comp. Rear CaseMaterial: Inconel 909

V2500 Comp. Front CaseMaterial: Ti 6‐4

Commercial Aircraft – Engine Case

3‐2.  Core Product (1/7)

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Commercial Aircraft – Yoke/Link/Mount

3‐2.  Core Product (2/7)

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CFM56 HANGER

GE90 HANGER

Material :    RENE 77

Commercial Aircraft – Hangers/Nozzles

TurbineNozzlesTurbineNozzles

3‐2.  Core Product (3/7)

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Commercial Aircraft – Landing Gears

3‐2.  Core Product (4/7)

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TGB**

AGB*

Gear Box

Housing

Commercial Aircraft

* AGB = Accessory Gear‐Box** TGB = Transfer Gearbox+ MRJ = Mitsubishi Regional Jet

3‐2.  Core Product (5/7)

MRJ+ Fixture

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INDUSTRIAL PRODUCTS– Drinking‐filling machinery components and sub‐assembly– Assembly for packing equipment of instant noodles.

3‐2.  Core Product (6/7)

Mitsubishi Heavy Industry Food & Packaging Machinery Co., Ltd.

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Many Others

Clip ProductsEBARA Submersible Pump

Chamber Cassette

3‐2.  Core Product (7/7)

Pump Housing

Resin Passage Component

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晟田3‐3.  Major Customers

Commercial Aircraft (70% Sales)Commercial Aircraft (70% Sales)

AIDC Sumitomo Precision Products Safran Group –Aircelle、Hispano‐Suiza

Industrial and Others (30% Sales)Industrial and Others (30% Sales)

Mitsubishi Heavy Industry Japan Steel Works Closure Systems International (CSI)

Customer satisfaction：Quality, Price, Delivery and InitiativeCustomer satisfaction：Quality, Price, Delivery and Initiative

2012 Commercial Aircraft Customer Share Ratio

12.8%

5.0%2.8%0.5%

78.8%

AIDCSPPAircelleAVIOCASTOthers

2012 Overall Customer Market Ratio

U.S.A.0.39%

France3.54%

Taiwan61.07%

Japan35.0%

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Total revenue for Jan‐June, 2013 is NT$ 411.16 million, growth increased by 49.31% compare to the same period last year.

Gross profit margin is 29% for Jan‐June, 2013.

3‐4.  Sales Revenue

308.84

445.90

602.75711.38

0100200300400500600700800

2009 2010 2011 2012 (Year)

Rev

enue

in m

illio

ns o

f NT$

20%

23%

25%

28%

30%

33%

35%

Gro

ss P

rofit

Mar

gin

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9.70%

20.14%70.16%

14.48%

23.67% 61.84%

Aerospace PartsFood & Packaging Machinery PartsEtc.

Y 2011Y 2012

3‐5.  Sales Volume

58.89%

41.11%

Domestic SaleExport Sale

61.07%

38.93%

Year

Main Products Volume Revenue Volume Revenue Volume Revenue Volume RevenueAerospaceParts

109,579 408,686 7,235 90,411 103,102 328,276 4,596 44,476

Food &Packaging

- - 39,756 68,984 　- - 42,055 87,303

Etc. 22,796 25,785 71,077 117,518 22,194 26,662 137,603 116,029Total 132,375 434,471 118,068 276,913 125,296 354,938 184,254 247,808

Export Sale

Revenue in thousands of NT$

Domestic Sale Export Sale20112012

Domestic Sale

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晟田

Y1999 ISO 9001:2008

Y2002 AS 9100B GEAE Holemaking, P11TF12

Y2008 PRI NADCAP EDM (AC7116/3 Rev A)

Y2009 Messier‐Dowty (Code SC‐439)   Aircelle (Code 105844) Snecma

Y2010 PRI NADCAP NDT‐PT PRI NADCAP Holemaking

Y2012 AS9100C

3‐6.  International Certification

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晟田3‐7.  Competitive Advantages (1/2)

Barriers in Aerospace International Certification1. International Aerospace Quality System certified: AS9100C2. PRI‐NADCAP* Special Process Qualification: NDT‐PT, EDM, Holemaking 

Multi‐axis machining equipment and techniques1. Over 210 units of CNC machining equipment available (for Japan Okuma/Mazak equipment, no. 

of equipment>30% , investment amount>70% )2. 5‐Axis machining centre 33 units，4‐Axis Horizontal machining centre 26 units, Multi‐Purpose 

CNC machine 4 units3. 3D 5‐Axis (include turning‐milling complex) CAD/CAM program design technology and 

manufacturing process production technology4. MetalMax TXF Dynamics Analysis and Machining Process Optimization5. Japan Mazak Flexible Manufacturing System

Quality inspection capability1. High precision CMM 11 units2. Development of CMM Automatic Measuring Program3. 6 Sigma/ SPC for quality engineering techniques

Remark: *PRI‐NADCAP= Performance Review Institute‐National Aerospace and Defense Contractors Accreditation Program 

**CMM         = Coordinate Measuring MachineRef.

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晟田3‐7.  Competitive Advantage (2/2)

Accreditation for in‐house special processes bring added value to products1. NADCAP certified special processes:

NDT‐PT* Conventional Machining‐Holemaking EDM**

2. Process with equipment finished installation and await for accreditation: Vacuum Heat Treating Plasma Thermal Spray

Adaptive manufacturing approach to meet customer requirements1. To meet short delivery time with wide‐variety‐small‐volume orders in accordance with major 

customers’ request;2. Provide service for product module or finial assembly.

Serve precision industry customers with aerospace standard technologies and quality.

Give consideration to both Aerospace and Precision Industry markets, aggressively expanding global customer base to diversify our risk.

Remark:  *NDT‐PT = Non‐Destructive Testing‐Penetrate Testing**EDM   = Electric Discharge Machining

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晟田4.  Research & Development Overview

4‐1.    R&D Team4‐2. R&D Project4‐3. R&D Planning

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Above data is as of in June, 2013. Annual quota of R&D staff is 40. 

4‐1.  R&D Team

Education of R&D Stuff

Master21.43%

Bachelor78.57%

19 25 30 30

294313

367392

0

50

100

150

200

250

300

350

400

450

2010 2011 2012 2013 (Year)

Nu

mbe

r of E

mpl

oyee

s

No. of R&D Stuff

No. of Total Employees

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2012.8.28-2013.2.1The Boeing CompanyAMRC Manufacturing Ltd.

Advanced Machining and Machining Dynamic Knowledge Transfer Project(Industrial Cooperation Program)(Industrial Cooperation Program)

2010.04.01-2012.03.31

Gloria Material Technology Corp.S-Tech Corp.FullChamp Technology Co. Ltd.Drewloong Precision, Inc.Aero Win Technology Corp.

Aviation Alloy Material Production Technologyjoint development project(Industry Technology development Program (Industry Technology development Program funded by Ministry of Economic funded by Ministry of Economic Affairs,TaiwanAffairs,Taiwan))

2009.05.01-2011.4.30N/AKey components of Landing Gear Subsystemdevelopment project(Leading New Product Development Program (Leading New Product Development Program funded by Ministry of Economic funded by Ministry of Economic Affairs,TaiwanAffairs,Taiwan))

DurationCooperation PartnersProject name

Actively join the R&D projects of Government, Research Organization, Academia and Industry

4‐2.  R&D Project

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晟田4‐3.  R&D Plan

New Product Introduction1. Implement PDM system to perform the control of new product development 2. Product development includes: Process design, Fixture design and fabrication, NC 

program development, First article inspection approval3. Until May 2013, have completely finished 9 part numbers development to mass 

production stage for Aerospace components4. On average of 15 part numbers developed every month for Precision Industry 

Products New Special Processes in Development

1. Verification in progress: Vacuum Heat Treating Plasma Thermal Spray

2. Implementation in progress: Passivation Treatment ‐ Y2013 NDT‐MT, Magnetic Particle Testing ‐ Y2013 Shot Peening – Y2014

3. Planning: NDT‐UT, Ultrasonic Testing、TIG, Tungsten Inert Gas Welding、Brazing、Labs 

(Tensile、Hardness、Metallographic Test) 

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晟田5. Financial Overview

5‐1.    Debt to Asset Ratio 5‐2.    Income Statement5‐3.    Financial Ratios

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Ref.資產負債表

5‐1.  Debt to Asset Ratio

1,741

958

2,3232,275

1,426 1,452

0

500

1,000

1,500

2,000

2,500

3,000

2011 2012 2013Q2

Tota

l Ass

et, T

otal

Deb

t (M

illio

nN

T$)

20%

30%

40%

50%

60%

70%

80%

90%

100%

Deb

t to

Ass

et R

atio

Total Asset

Total Debt

Debt to Asset ratio

Long Term Debt to Total Debet Ratio

0%

10%

20%

30%

40%50%

60%

70%

80%

90%

100%

2011 2012 2013Q2

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晟田5‐2.  Income Statement

2.781.121.05Earnings Per Share (NT$)

13.60%82,0016.78%48,21211.14%45,818Net Income

0.47%2,854(4.94%)(35,177)(2.19%)(8,994)Non-operating Income and Expenses

14.28%86,04612.47%88,70116.68%68,569Operating Income

29.16%175,77626.82%190,79628.91%118,871Gross Profit

100.00%602,746100.00%711,384100.00%411,165Sales Revenue (Net)

％NT$％NT$％NT$

20112012Until June 2013Item

In Thousands, Except Earnings Per Share

0.0

0.5

1.0

1.5

2.0

2.5

3.0

2011 2012 2012Q2

Earnings Per Share (NT$)

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1.121.05Earning Per Share After Tax (NT$)

6.4411.14Net Profit Margin (%)

13.3713.49Income Before Tax

22.1615.53Sales IncomeTo Paid‐in Capital Ratio(%)

5.615.33Return on Equity (%)

2.892.40Return on Assets (%)

Profit Capability

2012Until June 2013Year

Analyzed Items

財務分析

5‐3.  Financial Ratios

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

16.0%

2011 2012 2012Q2

Net Profit Margin

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To ensure broaden operational requirements by continuing improvement on mechanical design and manufacturing technology, and cultivating precision machining and special processes personnel.

Supply customers with integrated service by providing One‐Stop Buying service.

Develop long term relationship with world leading companies, aim for becoming a 1st‐tier supplier.

Reserve capacity and provide satisfactory pricing to meet customer comprehensive requirements and grow with customers.

Enhance global competitiveness by becoming the system assembly supplier for each targeted industry.

Improve overall company operational performance in order to ensure the benefit is maximized for the shareholders and making sustainability.

Competitiveness and business growth are the main strategies to succeed the goal of substantial business

6.  Future Vision (1/2)

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Work with customers and grow with customersWork with customers and grow with customers

Phase ILand area ~25,000 m²

Phase II (Current facility)Land area ~12,000m²For the purpose of special processes and precision manufacturing 

Phase IIIIntend for future expansion (Y2014 Q3 ~ 2017)Land area ~9,000m²

6.  Future Outlook (2/2)

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晟田

感謝聆聽感謝聆聽Thanks for your attention!Thanks for your attention!

Q & A