EHang Reports Second Quarter 2022 Unaudited Financial Results

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– Total Revenues Up 152.5% QoQ
– High Quarterly Gross Margin of 67.1%
– Indicative Facilities of RMB1 Billion by Agricultural Bank of China Guangzhou Branch
– Increasing Deliveries in China and Orders/Pre-Orders in Asia
– Strategic Partnership with C.P. Group in Thailand

GUANGZHOU, China, Aug. 18, 2022 (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, 2022.

Financial and Operational Highlights for the Second Quarter 2022

Total revenues were RMB14.6 million (US$2.2 million), representing an increase of 152.5% from RMB5.8 million in the first quarter of 2022.

Gross margin was 67.1%, maintaining a high level with a further increase of 4.6 percentage points from 62.5% in the first quarter of 2022.

Operating loss was RMB74.3 million (US$11.1 million), compared with RMB63.8 million in the first quarter of 2022.

Adjusted operating loss1 (non-GAAP) was RMB51.2 million (US$7.6 million), compared with RMB41.7 million in the first quarter of 2022.

Net loss was RMB73.9 million (US$11.0 million), compared with RMB68.8 million in the first quarter of 2022.

Adjusted net loss2 (non-GAAP) was RMB50.8 million (US$7.6 million), compared with RMB40.9 million in the first quarter of 2022.
Cash, cash equivalents, restricted cash and short-term investments balances were RMB240.7 million (US$35.9 million) as of June 30, 2022.

Sales and deliveries of EHang 216 AAVs were 8 units, representing an increase of 166.7% from 3 units in the first quarter of 2022.

Under the 100 Air Mobility Routes Initiative, more than 5,700 operational trial flights of EHang 216 have been conducted in practical scenarios at 11 operation spots in China to date.
Business Highlights for the Second Quarter 2022 and Recent Updates

EH216-S Type Certification Updates

The EH216-S Type Certification (“TC”) process has progressed into new phases following that the Civil Aviation Administration of China (“CAAC”) issued EHang with the first Special Conditions for TC of a human-carrying unmanned aircraft system specially for EH216-S in February 2022. The CAAC TC expert team and EHang have reached a consensus on the Project Specific Certification Plan, Certification Basis, and the Certification Plan, respectively.

On top of references to CCAR-23 and many other internationally recognized regulations and standards, and conventional aircraft configuration management and airworthiness experience, EHang certification team has made further innovative explorations on new topics related to unmanned aircraft system, such as unmanned system, data link and ground control system, and worked out 13 means of compliance applicable to EH216. We are continuing carrying out internal tests and planning the activities for the demonstration of compliance.

Partnership with Tianxingjian on Scenic Flight Project with Its Purchased EHang 216 AAVs at Aizhai Wonder Tourist Area in Jishou, Hunan, China
In June 2022, EHang received an initial purchase order for 5 units of EHang 216 AAVs from Tianxingjian Cultural Tourism Investment and Development LLC., an affiliated enterprise of the Jishou city government in China’s Hunan province, with deliveries for all 5 units completed. The two parties plan to develop a scenic flight project at the Aizhai Wonder Tourist Area in Jishou and have initiated trial flight operations at this newly-developed spot since the second quarter. Tianxingjian plans to purchase an additional 25 units of EHang 216 as the project progresses.

Strategic Partnership with Agricultural Bank of China Guangzhou Branch with Indicative Credit Facilities of RMB1 Billion for Long-Term Cooperation
In June 2022, EHang entered into a strategic partnership with the Guangzhou Branch of Agricultural Bank of China (“ABC”), one of the world’s 10 largest commercial banks. ABC Guangzhou Branch is expected to provide EHang with comprehensive banking services, including indicative credit facilities of RMB1 billion, to support EHang’s operations in China. This partnership with ABC Guangzhou Branch will offer tremendous support for the Company’s long-term sustainable business growth, including on R&D, manufacturing, and sales and operations.

Prestige Aviation’s Pre-Order for 100 Units of EHang 216 in Indonesia
In April 2022, EHang received a pre-order for 100 units of EHang 216 from Prestige Aviation, an Indonesian aviation company and a subsidiary of Prestige Corp. Prestige Aviation previously purchased one unit of EHang 216 from the Company with successful flight demonstrations conducted in Bali and Jakarta, Indonesia.

Strategic Partnership with C.P. Group to Introduce AAVs into Thailand
In May 2022, EHang formed a strategic partnership with Charoen Pokphand Group Co., Ltd. (“C.P. Group”), one of the largest conglomerates in Thailand, with an intent to establish a joint venture in Thailand for AAV sales and Urban Air Mobility (“UAM”) operations.

CEO Remarks

Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer, said, “During the past quarter, we achieved excellent results from our efforts in actively adapting to the macro environment and gradually recovering from the continuous impact of the COVID-19 resurgence in China. Our unique and leading AAV products and solutions drove the increases in orders, pre-orders, deliveries and customers especially in domestic and Southeast Asia markets, bringing total revenues to an increase of up to 152.5% quarter-over-quarter and high quarterly gross margin of 67.1%. We are pleased to expand our strategic business and financial partners, such as C.P. Group in Thailand on AAV sales and UAM operations, and the Agricultural Bank of China Guangzhou Branch with RMB1 billion indicative credit facilities for long-term cooperation, which will further diversify our funding sources to propel our future growth.”

“More importantly, we are grateful for both the CAAC and our certification team’s efforts, professionalism, innovation spirit, and great support, that made our today’s certification progress and breakthrough possible, bringing us closer to the goal of the EH216-S type certification and a new era of urban air mobility.”

Financial Results for the Second Quarter 2022

Revenues

Total revenues were RMB14.6 million (US$2.2 million), up 152.5% from RMB5.8 million in the first quarter of 2022, primarily due to the increase in the sales volume of AAV products.

Costs of revenues

Costs of revenues were RMB4.8 million (US$0.7 million), up 121.0% from RMB2.2 million in the first quarter of 2022, primarily due to the increase in the sales volume of AAV products.

Gross profit

Gross profit was RMB9.8 million (US$1.5 million), up 171.4% from RMB3.6 million in the first quarter of 2022.

Gross margin was 67.1%, up 4.6 percentage points from 62.5% in the first quarter of 2022. The increase in gross margin was mainly attributed to changes in revenue mix.

Operating expenses

Total operating expenses were RMB86.5 million (US$12.9 million), compared with RMB68.2 million in the first quarter of 2022.

Sales and marketing expenses were RMB12.2 million (US$1.8 million), compared with RMB12.7 million in the first quarter of 2022.

General and administrative expenses were RMB39.6 million (US$5.9 million), compared with RMB23.5 million in the first quarter of 2022. The increase was mainly attributed to professional service fees mainly related to annual report filing and some other legal matters as well as additional provisions for accounts receivable in light of the impacts from the continuous COVID-19 epidemic and control measures in China.

Research and development expenses were RMB34.7 million (US$5.2 million), compared with RMB32.0 million in the first quarter of 2022. The increase was mainly attributed to the continuous development of new AAV models and the ongoing EHang 216 certification.
Adjusted operating expenses3 (non-GAAP)

Adjusted operating expenses were RMB63.4 million (US$9.5 million), compared with RMB46.1 million in the first quarter of 2022. Adjusted sales and marketing expenses, adjusted general and administration expenses, and adjusted research and development expenses were RMB7.7 million (US$1.2 million), RMB28.8 million (US$4.3 million) and RMB26.9 million (US$4.0 million) in the second quarter of 2022, respectively. The increase in adjusted operating expenses was primarily due to the same reasons discussed under the heading “Operating expenses” above.

Operating loss

Operating loss was RMB74.3 million (US$11.1 million), compared with RMB63.8 million in the first quarter of 2022.

Adjusted operating loss (non-GAAP)4

Adjusted operating loss was RMB51.2 million (US$7.6 million), compared with RMB41.7 million in the first quarter of 2022.

Net loss

Net loss was RMB73.9 million (US$11.0 million), compared with RMB68.8 million in the first quarter of 2022.

Adjusted net loss (non-GAAP)5

Adjusted net loss was RMB50.8 million (US$7.6 million), compared with RMB40.9 million in the first quarter of 2022.

Adjusted net loss attributable to EHang’s ordinary shareholders was RMB50.4 million (US$7.5 million), compared with RMB40.7 million in the first quarter of 2022.

Loss per share and per ADS

Basic and diluted net loss per ordinary share were both RMB0.64 (US$0.10). Adjusted basic and diluted net loss per ordinary share6 (non-GAAP) were both RMB0.44 (US$0.07).

Basic and diluted net loss per ADS were both RMB1.28 (US$0.20). Adjusted basic and diluted net loss per ADS7 (non-GAAP) were both RMB0.88 (US$0.14).

Balance Sheets

The cash, cash equivalents, restricted cash and short-term investments balances were RMB240.7 million (US$35.9 million) as of June 30, 2022.
Business Outlook

We expect signs of business recovery in the second half year as we are actively adapting to the macro environment, continuing to move forward on EHang 216 certification, securing more product orders, and expanding our regional aerial media business in the Europe market. We remain confident in our growth potentials and long-term outlook given our core values and unique advantages.

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 changes, especially uncertainties and situations related to the certification process, COVID-19 epidemic and control measures, and global political and economic landscape.

Conference Call

EHang’s management team will host an earnings conference call at 8:00 AM on Thursday, August 18, 2022, U.S. Eastern Time (8:00 PM on August 18, 2022, Beijing/Hong Kong Time).

To join the conference call via telephone, participants must use the following link to complete an online registration process. Upon registering, each participant will receive email instructions to access the conference call, including dial-in information and a PIN number allowing access to the conference call.

Source: ehang.com

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