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EHang Announces Results: A Glimmer of Hope for Passenger Drones and Urban Air Mobility

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EHANG 184

Like Lazarus, EHang has made a habit out of rising from what many believed for them to be dead.  First known as a Chinese-based consumer drone manufacturer with their popular Ghost drone, they pivoted several years ago to become a major name in passenger drones.

Today, the company announced 4th quarter results that show EHang is starting to get more traction with cities in Asia, the Middle East  and Europe that are starting to take a good long look at adding drone vehicles to their transportation mix, a concept known as urban air mobility (UAM).  Many cities are moving forward on plans to integrate UAM as they run out of  ground space; the technology advances; and people begin to feel more comfortable with the technology.

EHang reported significant gains in revenues, gross margin,  profits and units sold in Q4 of 2019.  This follows a successful round of financing in the fourth quarter of last year.

Highlights from their recent financial statements:

Fourth Quarter 2019 Financial and Operational Highlights

  • Total revenues were RMB54.7 million (US$7.9 million), an increase of 421.4% year over year and an increase of 57.4% sequentially. Revenues from air mobility solutions were RMB37.1 million (US$5.3 million), an increase of 63.6 times year over year and an increase of 49.1% sequentially.
  • Gross margin was 60.7%, an increase of 4.6 percentage points year over year and an increase of 5.8 percentage points sequentially.
  • Operating profit was RMB2.1 million (US$0.3 million), compared with operating loss of RMB22.9 million in the fourth quarter of 2018 and operating loss of RMB10.6 million in the prior quarter.
  • Adjusted operating profit1 (non-GAAP) was RMB3.8 million (US$0.5 million), compared with adjusted operating loss of RMB17.8 million in the fourth quarter of 2018 and an adjusted operating loss of RMB7.4 million in the prior quarter.
  • Net loss was RMB0.2 million (US$0.02 million), compared with net loss of RMB30.7 million in the fourth quarter of 2018 and net loss of RMB10.2 million in the prior quarter.
  • Adjusted net income2 (non-GAAP) was RMB2.9 million (US$0.4 million), compared with adjusted net loss of RMB25.6 million in the fourth quarter of 2018 and adjusted net loss of RMB7.0 million in the prior quarter.
  • Net cash provided by operating activities was RMB15.2 million (US$2.2 million), significant growth from negative RMB6.7 million in the fourth quarter of 2018 and negative RMB30.4 million in the prior quarter.
  • Sales of the EHang 216, the world’s first commercially delivered passenger-grade AAV, reached 26 units, compared with none in the fourth quarter of 2018 and 18 units in the prior quarter.

 

EHang recently announced an agreement with the city of Seville,Spain to partner with Ehang on an urban mobility project.

The following is excerpted from an EHang press release:

GUANGZHOU, China, March 24, 2020 (GLOBE NEWSWIRE) — EHang Holdings Limited (“EHang” or the “Company”) (Nasdaq: EH), the world’s leading autonomous aerial vehicle (AAV) technology platform company, today announced its unaudited financial results for the fourth quarter and full year ended December 31, 2019.(see Q4 2019 Financial and Operational Highlights above.)

Full Year 2019 Financial and Operational Highlights

  • Total revenues were RMB121.8 million (US$17.5 million), an increase of 83.2% from RMB66.5 million in 2018. Revenues from air mobility solutions were RMB85.9 million (US$12.3 million), an increase of 26.6 times from RMB3.1 million in 2018.
  • Gross margin was 58.5%, an increase of 7.7 percentage points from 50.8% in 2018.
  • Operating loss was RMB46.3 million (US$6.7 million), a decrease of 37.7% from RMB74.3 million in 2018.
  • Adjusted operating loss (non-GAAP) was RMB31.6 million (US$4.5 million), a decrease of 39.3% from RMB52.0 million in 2018.
  • Net loss was RMB48.0 million (US$6.9 million), a decrease of 40.4% from RMB80.5 million in 2018.
  • Adjusted net loss (non-GAAP) was RMB31.9 million (US$4.6 million), a decrease of 45.2% from RMB58.2 million in 2018.
  • Sales of the passenger-grade AAVs reached 61 units3 in 2019, compared with only 3 units in 2018.

Business Highlights for the Fourth Quarter and Full Year 2019

  • On December 12, 2019, EHang successfully completed its initial public offering (IPO) of its American depositary shares (ADSs)4 listed on Nasdaq Global Market under the ticker symbol “EH” and became the world’s first publicly traded Urban Air Mobility (UAM) company.
  • As a leader in the global UAM industry, EHang carried out trial or demo flights (including passenger-carrying flights) in 15 cities across China and Europe in 2019 to showcase the UAM applications. These cities include Guangzhou, Taizhou, Suzhou, Hangzhou, Chongqing, Yantai, Shenyang, Changchun, Dalian, Harbin, Shijiazhuang, Yangjiang, Turpan and Kashgar in China and Vienna in Europe.
    EHang established partnerships on UAM with city governments in China and Europe in 2019, including Guangzhou in China and Linz in Austria.  The Company expects to establish more city partnerships in 2020 to expand its UAM footprint globally.
  • As the first company approved for the passenger-grade AAV airworthiness certification pilot program by the Civil Aviation Administration of China (CAAC) and a member of the CAAC Special Expert Taskforce, EHang has been playing an important role in developing standards and regulations in China, such as the Provisional Administrative Measures for Trial Operations of Special Types of Unmanned Aerial Vehicles.
  •  In October 2019, the Company signed an agreement to establish a command-and-control center for unmanned aerial system traffic management (UTM) at Heydar Aliyev International Airport in Baku, Azerbaijan, first of its kind globally.
  • Under a strategic partnership with Vodafone GmbH established in October 2019, Vodafone will provide 5G connectivity to EHang AAVs for UAM applications in Europe and the parties will cooperate in the development of a UAM ecosystem in Europe.

EHang hired Mr. Edward Xu, the Ex-Head of Asia Transportation Research at Morgan Stanley, as its Chief Strategy Officer to lead the strategic planning initiatives in UAM.

Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer commented: “In December 2019, EHang successfully completed its IPO on Nasdaq and became the world’s first publicly traded UAM company, which was a milestone achievement not only for EHang but also for the whole industry. As a new public company, EHang delivered record high quarterly results with impressive financial and operating performance. Our revenues grew significantly, gross margin continued to increase and we achieved first ever quarterly positive operating cash flow and operating profit. Such achievements reflect our strong competitive advantages arising from our global leadership in the UAM industry. Our business is experiencing some short-term turbulence from the COVID-19 outbreak. These include absence and late return of frontline workers, delayed fulfillment across our supply chain, and the short-term disruption on some of our customers’ industries such as tourism. However, this has also created new opportunities for us to explore, such as emergency delivery and rescue. We are confident in the long-term growth and robustness of our business. We are very optimistic about the future of the global UAM industry, which is expected to reach US$1.5 trillion by 2040 according to Morgan Stanley. We are confident that we will keep our leadership in this promising industry.”
Mr. Hu continued, “We are the first to enter into commercialization in the global industry. Our first-mover advantage has helped us be a pioneer in commercializing AAVs and establishing market standards.  Our breakthroughs in the regulatory front, both in China and internationally (e.g. having obtained the first flight permit for the EHang 216 AAV by the Federal Administration of Aviation (FAA) in the US and the first flight permit for the EHang 216 AAV by the Civil Aviation Authority in Norway), have also underpinned our industry leadership and enhanced our customers’ confidence globally. Leveraging all these, we aim to not just be a technology product provider but a leading UAM platform company offering a comprehensive suite of solutions and services to develop an integrated UAM ecosystem. We look forward to building more partnerships with other businesses, city governments, regulators and investors globally to achieve this strategic goal and benefiting together from fast growing demands for UAM globally.”

 

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