• Achieved Record High Quarterly Gross Margin Again
• EHang 216 AAV’s CAAC Type Certification Process Prioritized
• Released VT-30 Long-Range Passenger-grade AAV
• Completed EHang 216F’s Technical Examination for Commercialization
• Commenced Operations of New Yunfu Production Facility
GUANGZHOU, China, Aug. 25, 2021 (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 second quarter ended June 30, 2021.
Second Quarter 2021 Financial and Operational Highlights
Total revenues were RMB12.2 million (US$1.9 million), down 65.9% year over year. The decrease was mainly due to the strategic transition into a more operation platform-oriented model.
Gross margin was 68.0%, an increase of 10.4 percentage points year over year. The increase was mainly due to higher margin of a command-and-control system for smart city management project completed in the second quarter of 2021.
Operating loss was RMB74.9 million (US$11.6 million), compared with operating loss of RMB19.2 million in the second quarter of 2020.
Adjusted operating loss1 (non-GAAP) was RMB49.4 million (US$7.7 million), compared with adjusted operating loss of RMB11.1 million in the second quarter of 2020.
Net loss was RMB74.6 million (US$11.6 million), compared with net loss of RMB19.7 million in the second quarter of 2020.
Adjusted net loss2 (non-GAAP) was RMB49.1 million (US$7.6 million), compared with adjusted net loss of RMB11.7 million in the second quarter of 2020.
Sales of the EHang 216 series of passenger-grade AAVs, were 3 units, compared with 16 units in the second quarter of 2020, as the Company is experiencing a gradual transition from a product sales focused model to an operation platform-oriented model.
Second Quarter 2021 Business Highlights
The EHang 216 AAV’s CAAC Type Certification Process Prioritized
In January this year, the Civil Aviation Administration of China (“CAAC”) officially accepted EHang’s Type Certification application for the EHang 216 AAV. Since April, the CAAC’s designated type certification expert team has conducted several rounds of review meetings and inspections. Critical consensus has been reached that the type certification of EHang 216 AAV is an important project in China and needs to be prioritized.
Release of the Long-Range VT-30 Passenger-grade AAV to Expand Regional Air Mobility Coverage
In May, EHang released the “VT-30”, a new model of electric dual-seat passenger-grade AAV in EHang’s product suite that is designed for inter-city air transportation and complementary to the EHang 216 designed for intra-city air mobility. With a hybrid structure of eVTOL and fixed wings, the VT-30 is designed to travel a distance of up to 300km with a designed flight time of up to 100 minutes.
Continued Trial Flights to Further Demonstrate AAV Technical Strength and Urban Air Mobility (“UAM”) Use Cases
As the first mover and industry leader with strong capabilities of autonomous flying, EHang with local partners continued trial and demo flights with the EHang 216 AAV series at multiple public events showcasing its practical uses. For example, its maiden flight in Japan was successfully completed with the local partner in June with Japan’s first outdoor open airspace trial flight permission granted to a passenger-grade AAV. In April, the EHang 216 made an impressive debut at the Chinese Super League in Guangzhou by flying into the opening ceremony carrying a representative holding the championship trophy. In June, EHang participated in the anti-COVID-19 campaign in Guangzhou by transporting emergency supplies to quarantine areas using the EHang 216 and the EHang 216L AAVs.
Completion of the EHang 216F’s Technical Examination and Urban Fire Rescue Drills in China
In July, EHang completed a comprehensive 10-month technical examination on the EHang 216F and 52 different types of tests by the China National Fire-Fighting Equipment Quality Supervision Testing Center, which is under the Ministry of Emergency Management of China. In August following the examination, the EHang 216F AAVs were utilized by the local emergency and/or fire departments in several urban fire rescue drills in China’s cities of Qingdao, Guangzhou and Hezhou. These have laid a solid foundation for the commercialization of EHang 216F AAVs.
Commencement of Operations in Yunfu Production Facility
EHang’s new production facility in Yunfu, China commenced operations in June. It is approximately 24,000 square meters in gross floor area to house the major AAV production processes from manufacturing key components and carbon fiber composite airframes to AAV assembling and flight testing in designated function areas. It has a planned initial annual capacity of 600 units of passenger-grade AAVs.
The Investor Day, which was scheduled to be held at the new Yunfu production facility on August 18, 2021, had been unexpectedly and urgently called off by the local governmental authorities right before the event. This was due to the re-tightened travel and group gathering restrictions, as the newest COVID-19 cases of the Delta variant were identified in Guangzhou city, where the Company’s main office is located, and other areas in China. The Company will continue to monitor the COVID-19 situation as it evolves, and communicate with investors and local authorities in a timely manner if the Yunfu Investor Day will be rescheduled to a later date.
“In the second quarter, our quarterly gross margin increased to a record high of 68%, reflecting our growing competitive strengths and leadership position,” said Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer. “We made meaningful progresses toward the certification process and trial operations for our existing AAV products such as the EHang 216 and the EHang 216F, and further made our product and solution portfolio well-rounded for urban air mobility by introducing the new model VT-30.”
“Looking ahead, we will continue moving towards our long-term strategic goal of becoming a UAM platform operator through accumulating solid momentum as we are implementing the ‘100 Air Mobility Routes Initiative’. With that goal in mind, we have so far targeted 15 self-run operation spots and another 21 spots run by our customers, mostly in Southern China. Meanwhile, we are making efforts to get ourselves ready for trial operations through production optimizations and the prioritizing certification process. We are confident in maintaining our leadership position and competitiveness among our industry peers in the burgeoning UAM market.”
Second Quarter 2021 Financial Results
Total revenues were RMB12.2 million (US$1.9 million), down 65.9% year over year with RMB35.7 million in the second quarter of 2020. The decrease was mainly due to the Company’s strategic transition into a more operation platform-oriented model.
Costs of revenues
Costs of revenues were RMB3.9 million (US$0.6 million), down 74.3% year over year, primarily due to the change in the sales volume of AAV products and solutions.
Gross profit was RMB8.3 million (US$1.3 million), down 59.8% from RMB20.6 million in the second quarter of 2020.
Gross margin was 68.0%, up 10.4 percentage points from 57.6% in the second quarter of 2020. The increase was primarily due to higher margin of a command-and-control system for smart city management project completed in the second quarter of 2021.
Total operating expenses were RMB85.3 million (US$13.2 million), up 96.5% from RMB43.4 million in the second quarter of 2020. Operating expense as a percentage of total revenues was 701.6%, compared with 121.7% in the second quarter of 2020. The increase in operating expenses was primarily due to the reasons discussed under the heading “Adjusted operating expenses (non-GAAP)” below and the total increase of RMB17.5 million (US$2.7 million) in share-based compensation expenses and the charges to sales and marketing expenses, general and administration expenses and research and development expenses were RMB1.4 million (US$0.2 million), RMB8.4 million (US$1.3 million) and RMB7.7 million (US$1.2 million), respectively.
Adjusted operating expenses3 (non-GAAP)
Adjusted operating expenses were RMB59.9 million (US$9.3 million), representing an increase of 69.0% from RMB35.4 million in the second quarter of 2020. Adjusted operating expenses as a percentage of total revenues was 492.0%, compared with 99.2% in the second quarter of 2020.
Adjusted sales and marketing expenses were RMB6.2 million (US$1.0 million), up 3.5% from RMB6.0 million in the second quarter of 2020.
Adjusted general and administration expenses were RMB29.9 million (US$4.6 million), up 151.9% from RMB11.9 million in the second quarter of 2020. The increase was mainly due to the additional expenses related to extension of annual report filing and prudent provisions related to the COVID-19 impacts.
Adjusted research and development expenses were RMB23.8 million (US$3.7 million), up 35.2% from RMB17.5 million in the second quarter of 2020. The increase was mainly due to an increase in expenditure for developing new AAV models, including both passenger-grade and non-passenger-grade AAV models like VT-30, as well as increased R&D personnel expenses.
Operating loss was RMB74.9 million (US$11.6 million), compared with operating loss of RMB19.2 million in the second quarter of 2020. Operating loss as a percentage of total revenues was negative 615.8%, compared with negative 53.7% in the second quarter of 2020.
Adjusted operating loss (non-GAAP)
Adjusted operating loss was RMB49.4 million (US$7.7 million), compared with adjusted operating loss of RMB11.1 million in the second quarter of 2020. Adjusted operating loss as a percentage of total revenues was negative 406.3%, compared to negative 31.2% in the second quarter of 2020.
Net loss was RMB74.6 million (US$11.6 million), compared with net loss of RMB19.7 million in the second quarter of 2020.
Adjusted net loss (non-GAAP)
Adjusted net loss was RMB49.1 million (US$7.6 million), compared with adjusted net loss of RMB11.7 million in the second quarter of 2020.
Adjusted net loss attributable to EHang’s ordinary shareholders was RMB48.9 million (US$7.6 million).
Loss per share and per ADS
Basic and diluted net loss per ordinary share were both RMB0.67 (US$0.10). Adjusted basic and diluted net loss per ordinary share4 (non-GAAP) were both RMB0.44 (US$0.07).
Basic and diluted net loss per ADS were both RMB1.34 (US$0.20). Adjusted basic and diluted net loss per ADS5 (non-GAAP) were both RMB0.88 (US$0.14).
The Company’s revenue forecast for 2021 remains between RMB130 million and RMB180 million, as the Company strategically transitions into a more operation platform-oriented model and the commercialization of the EHang 216F, the firefighting model, among other AAVs.
The above outlook is based on information available as of the date of this press release and reflects the Company’s current and preliminary expectations regarding its business situation and market conditions. The outlook is subject to change, especially considering uncertainties and situations related to how the COVID-19 pandemic further develops.
EHang’s management team will host an earnings conference call at 8:00 AM on Wednesday, August 25, 2021, U.S. Eastern Time (8:00 PM on August 25, 2021, Beijing/Hong Kong Time).
Please register in advance for the conference using the link provided below and dial in 10 minutes before the conference is scheduled to begin. Conference access information will be provided upon registration.
Participant Online Registration: http://apac.directeventreg.com/registration/event/8598052.
A replay of the conference call may be accessed by phone at the following numbers until September 2, 2021. To access the replay, please reference the conference ID 8598052.
International +61 2 8199 0299
United States +1 855 452 5696
+1 646 254 3697
Hong Kong +852 800963117
Mainland China +86 4006322162
A live and archived webcast of the conference call will be available on the company’s investors relations website at http://ir.ehang.com/.