EHang Q2 2022 Earning Call: Airworthiness Certificate on the Way

Miriam McNabb

2 years ago

EHang Q2 2022 Earnings Call EHang Holdings Limited is one of the leading passenger eVTOL companies in the world.

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DroneLife · EHang – Q2 – 2022 – Earnings – New – Orders – Airworthiness – Certification

At the EHang Q2 2022 earnings call last week, company executives talked about what’s next for the company pioneering aerial tourism and more in Asia.

EHang Holdings Limited [NASDAQ:EH] is held in the AdvisorShares Drone Technology ETF [NYSE ARCA:UAV], the only ETF dedicated to the drone economy. The AdvisorShares Drone Technology ETF is a thematic investment strategy seeking to capture the growth opportunities in drones and autonomous vehicles (AV). AdvisorShares is a DRONELIFE sponsor.

Since introducing the first EHang passenger eVTOL at the CES in 2016, the company has been at the forefront of developing passenger eVTOLs for applications that range from emergency response to aerial tourism. At the Q2 earnings call, company executives said that they’re close to achieving a first-of-its-kind airworthiness certificate from China’s airspace authorities – a step forward which will open the skies for EHang.

CEO Hu Huazhi said that during the pandemic, EHang “actively adapted to the macro environment at home and abroad,” expanding “our orders, preorders, deliveries and customers, especially in China and Southeast Asia,” and driving revenue up by over 150% from Q1.

While the company is actively selling, they’re focused on airworthiness certification for the EHang 216-S, a vehicle designed for on-deman autonomous air travel in urban areas. According to Huazhi, certification is close: “Both the CAAC and Guangdong government have clearly put pushing forwards relevant UEM pilot project and strongly pushing forward EHang 216-S AAV type certification process,” he said.

COO Fang Xin explained the importance of the certification. The 216-S is the aircraft currently used for a trial “scenic flight project,” which takes tourists up for a birds-eye view of the local landscape. As tourism recovers from the pandemic, more than 5,700 operational flights of the EH216 have operated on a trial basis from 11 operational hubs: the customer, however, plans to increase their fleet from 5 aircraft to 30.

“After obtaining the airworthiness certificate, EHang 216 is expected to provide our tourism customers and end users with a unique, safe, technologically advanced, cost effective and pleasant low altitude flight tourism solution and experience,” said Xin.

All told, EHang has received more than 200 preorders for their passenge eVTOLs.

Summary of the highlights (numbers presented in RMB) from CFO Richard Liu:

In Q2 of 2022, total revenues were RMB14.6 million, representing an increase of 152.5% from RMB5.8 million in Q1. This was along with a 166.7% increase in EHang 216 AAV deliveries in Q2 to eight units from three units in Q1.
In Q2, adjusted operating expenses, which are operating expenses excluding share-based compensation expenses, were RMB63.4 million compared with RMB46.1 million in Q1. The increase was mainly attributed to continuous R&D of new AAV models and the ongoing EHang 216 certification process, both of which are progressing steadily and professional service fees related to annual report filing and other legal matters and additional provisions for accounts receivable in light of impact from the ongoing COVID-19 epidemic and the control measures in China.
In Q2, adjusted operating loss was RMB51.2 million compared with RMB41.7 million.
Adjusted net loss was RMB50.8 million in Q2 compared with RMB40.9 million in Q1.
Balance sheet: RMB240.7 million of cash, cash equivalents, restricted cash, and short-term investments as of the end of Q2.