Core Viewpoint - The event marked the first flight demonstration of EHang's EH216-S eVTOL in the UNESCO World Heritage site of Jingmai Mountain, showcasing a balance between ecological protection and technological application in tourism [1][2]. Group 1: Event and Technology - The flight demonstration of the EH216-S eVTOL took place in Pu'er City, highlighting the integration of technology in cultural heritage and tourism [1][2]. - The EH216-S is an all-electric, zero-emission aircraft designed for short-distance commuting and sightseeing, capable of carrying two passengers [7]. Group 2: Economic Development and Collaboration - Pu'er City aims to leverage low-altitude economy as a driver for multi-sectoral development, including transportation, tourism, environmental protection, and rural revitalization [2][5]. - The establishment of two low-altitude economic platform companies, Pu'er Sky City Development Co., Ltd. and Pu'er Tea City Wings Drone Co., Ltd., signifies a strategic move to explore innovative development models in the low-altitude economy [5]. Group 3: Future Applications and Impact - Future applications of drones in Pu'er will include emergency rescue, firefighting, agricultural protection, and pilot training, positioning the drone industry as a key driver for industrial transformation [5]. - The EH216-L logistics version and EH216-F firefighting version were also showcased, indicating a comprehensive service model for the "low-altitude + tea industry" [8].

Core Insights - The emergence of flying cars and eVTOLs represents a significant evolution in the low-altitude economy, transitioning from science fiction to reality [3][4] - The current landscape shows a division between flying cars and eVTOLs, with eVTOLs dominating the commercial market due to lower development costs and regulatory hurdles [10][19] - The industry is heavily reliant on existing electric vehicle technology, raising questions about the true innovation behind these aerial vehicles [5][14] Industry Overview - The first operational certificate for a manned autonomous aircraft was issued in March 2025, marking a milestone in the industry [4] - eVTOLs are primarily focused on vertical takeoff and landing, while flying cars require dual systems for both ground and air travel, complicating their development [10][12] - The eVTOL market is projected to grow significantly, with companies like EHang reporting revenues of 456.2 million yuan, a 288.5% increase year-on-year [19] Market Dynamics - The current market for flying cars is still in the conceptual phase, while eVTOLs have begun to see commercial viability, with over 70% market share [19] - Companies are facing challenges in meeting aviation safety standards, which differ significantly from automotive regulations, leading to increased costs and development time [16][17] - The infrastructure for low-altitude operations is lagging, with only 23 out of 1000 planned takeoff and landing points completed by 2025 [17] Customer Segmentation - The primary customers for eVTOLs are government entities, with commercial applications still limited [22][23] - The high cost of flying cars makes them accessible only to affluent individuals, with prices exceeding one million yuan and additional operational costs [23] - Companies are exploring various business models, including cargo transport and emergency services, to validate their technologies and achieve profitability [19][24] Future Outlook - The next decade will be crucial for the low-altitude economy, with a focus on identifying real market needs and pain points [24] - The industry is expected to consolidate, with many flying car projects likely to fail, leaving only those that address genuine market demands [24] - The evolution of this sector will continue to draw from the supply chains established in the electric vehicle industry, indicating a strong interconnection between these two markets [24]

Core Insights - The article highlights the growing trend of low-altitude tourism projects in county regions, driven by natural endowments and the need to upgrade traditional tourism models [1][2] - The integration of low-altitude economy into existing industrial chains is emphasized as a way to create unique competitive advantages [1][4] Low-altitude Tourism Development - Low-altitude tourism projects, such as those in Shaanxi Yichuan and Anhui Yi County, are enhancing visitor experiences and stimulating local tourism [2] - The average daily reception for the Yichuan project exceeds 400 visitors during peak season, while the "Aerial View of Hongcun" project is expected to attract nearly 120,000 visitors in 2024 [2] - Current low-altitude tourism experiences utilize helicopters or light aircraft, with prices ranging from 300 to over 1,000 yuan per experience [2] - The advancement of eVTOL (electric Vertical Take-Off and Landing) aircraft is anticipated to lower the costs of these experiences [2] Strategic Collaborations and Infrastructure - EHang Intelligent has received operational certificates for its passenger drones, with plans to collaborate with various counties for low-altitude tourism projects [2][4] - Zhejiang Wencheng County has signed a strategic agreement to procure 300 EH216-S drones for air tourism and transportation development [2] - Wencheng County plans to establish 43 eVTOL take-off and landing points within three years, with five already completed [5] Regulatory and Management Innovations - The article discusses the importance of airspace management in promoting low-altitude economic development, with counties becoming testing grounds for innovative airspace policies [4] - Sichuan's pilot program for low-altitude airspace management has significantly reduced approval times for temporary airspace applications [4] Competitive Landscape and Differentiation - Counties are diversifying their low-altitude economy initiatives beyond tourism to include logistics and emergency services [6] - Zhejiang's pilot program for low-altitude economy aims to integrate flying with urban logistics and rural services [6] - Differentiation strategies include leveraging local industrial strengths and developing niche markets such as extreme sports and drone services [6] Safety and Technological Integration - The article stresses the need for safety measures and technological integration in developing low-altitude economies, including the use of big data and AI for air traffic management [6][7]

Investment Rating - The report maintains a "BUY" rating for EHang Holdings with an unchanged target price of US$30, indicating a potential upside of 76.9% from the current price of US$16.96 [1][3][17]. Core Insights - EHang's 1Q25 results were below expectations, with a 58% year-over-year decline in eVTOL aircraft deliveries, totaling only 11 units due to delays caused by weather, Chinese New Year seasonality, and operator certificate approvals. However, management anticipates a recovery in sales in 2Q25 [1][6]. - The company aims for a revenue target of RMB900 million in 2025, representing a 97% year-over-year growth, alongside a 40% increase in selling, general, and administrative (SG&A) expenses [1][2]. - EHang is recognized as a first-mover in the eVTOL market in China, having obtained essential certifications for mass production and operation [1][6]. Financial Summary - Revenue for FY25 is projected at RMB898 million, with a year-over-year growth of 97%. The adjusted net profit is expected to improve to a loss of RMB64 million, with a return to profitability anticipated in FY26 with a net profit of RMB178 million [2][14]. - The gross margin for 1Q25 slightly expanded to 62.4%, despite a significant revenue decline [6][7]. - EHang's inventories increased by 44% to RMB109 million as of March 2025, attributed to shipment delays [6]. Product Development - The VT35 eVTOL is the next key product, currently undergoing certification processes in China, with plans for a launch in 3Q25 [6][7]. - EHang has successfully obtained operating certificates for its subsidiaries, with commercial operations expected to commence in the coming months as safety remains a priority [6][7].

Core Viewpoint - The third Civil Aviation Science and Technology Innovation Achievement Exhibition showcased advanced flying vehicles, including flying cars and eVTOLs, highlighting innovations aimed at addressing urban congestion and enhancing short-distance travel efficiency [1][2][3]. Group 1: Flying Cars - The GOVY AirCar features a dual-structure design with an autonomous car and a flying vehicle, capable of reducing urban commute times from one hour to just 15 minutes [1]. - The GOVY AirJet, a high-performance flying car, can reach speeds of up to 250 km/h and facilitate intercity travel within 40 minutes across the Guangdong-Hong Kong-Macao Greater Bay Area [1][2]. - High safety measures are implemented in these flying cars, including a perception system that can identify small objects from 100 meters away, and the use of high-density liquid lithium-ion batteries [2]. Group 2: eVTOLs - The M1 eVTOL developed by Shanghai Yufeng Future Aviation Technology can carry five passengers, has a maximum load of 700 kg, and a cruising speed of 200 km/h with a range of 250 km [2][3]. - The M1 is designed for urban commuting and intercity connections, significantly reducing travel times from 2-3 hours to just 15-30 minutes [3]. - By 2030, the M1 is expected to establish fixed passenger routes, contributing to a three-dimensional transportation network [3]. Group 3: Industry Developments - EHang's EH216-S, a passenger drone, has begun commercial operations in Hefei, primarily for tourism, marking a significant step in China's low-altitude economy [4]. - EHang has established over 20 operational demonstration points across 16 cities in China, aiming to provide eVTOL flight services to the public [4]. - The exhibition serves as a platform for promoting innovation in civil aviation, focusing on the integration of education, technology, and talent within the industry [5].

CHANG | | 2 EHang Holdings Limited Q1 2025 Operational & Financial Results Notes: The photo shows EH216-S's flight in Benidorm, Spain, in February 2025. GHVNG IIZAL www.ehang.com Disclaimer These materials have been prepared by EHang Holdings Limited (the "Company") solely for informational purposes and have not been independently verified. No representations or warranties, express or implied, are made as to, and no reliance should be placed on, the accuracy, fairness or correctness of the information or op ...

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were RMB 26.1 million, a decrease compared to Q1 2024 and Q4 2024, primarily driven by decreased sales volume of EH216 series products [31][32] - Gross profit was RMB 16.3 million in Q1, with a gross margin improvement to 62.4% compared to 61.9% in the same period of 2024 and 60.7% in Q4 2024, indicating strong marketing competitiveness and pricing power [32] - Adjusted net loss was RMB 31.1 million in Q1, reflecting a decline in deliveries, but the company expects financial performance to improve as deliveries recover [34][36] Business Line Data and Key Metrics Changes - In Q1 2025, the company delivered 11 units of the EH216S, with the low delivery volume attributed to seasonal slowdown, internal budgeting processes of clients, and deferred orders due to the upcoming OC certification [14][15] - The company is expanding its Yunfu production base, which has doubled in size and will support an annual production capacity of up to 1,000 units once fully operational [16] Market Data and Key Metrics Changes - Following the issuance of operating certificates (OCs), consumer inquiries and order volumes have significantly increased, with expectations for a strong rebound in Q2 [18][19] - Major orders from provinces such as Jilin, Jiangxi, Guizhou, Hainan, Anhui, and Guangdong are expected to convert into deliveries starting in Q2 [19] Company Strategy and Development Direction - The company aims to evolve from manufacturing autonomous aerial vehicles into a comprehensive urban air mobility platform operator, providing a one-stop solution covering aircraft hardware, software, operational services, and standard systems [6] - The company is focused on a phased approach to commercialization, starting with low-risk scenarios like sightseeing flights before expanding into more complex urban air mobility services [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum over the next few quarters, maintaining the annual revenue guidance of RMB 900 million for 2025 [36][39] - The company is committed to safety and is implementing enhanced standards to ensure safe and compliant flight operations as it transitions to commercial operations [19][20] Other Important Information - The company has over 700 issued and pending patent assets worldwide, with nearly half of its team dedicated to R&D, positioning it as a global leader in autonomous flight systems [12] - The company is actively expanding its business into logistics and emergency rescue applications, with specialized UAVs already developed for these use cases [25][26] Q&A Session Summary Question: Outlook on significant growth in sales and deliveries - Management noted that Q1 performance declined due to seasonal impacts and deferred orders, but improvements in Q2 delivery volumes and sales are expected, with large orders converting into contracts [38] Question: Timeline for EH216 owners to obtain OC certificates - Management indicated that the issuance of OCs clarifies regulatory standards, which should reduce application timelines for future operators [41] Question: Competition and staying competitive - Management highlighted that urban air mobility and intercity air transport serve different markets, with the EH216S offering a compact footprint and lower costs compared to competitors [45][46] Question: Updates on production capacity and SG&A expenses - Management confirmed that the Yunfu facility's production capacity will increase to 1,000 units by the end of the year, and they will maintain stringent control on SG&A expense growth [81][83]

Financial Data and Key Metrics Changes - Total revenues for Q1 2025 were RMB 26.1 million, a decrease compared to Q1 2024 and Q4 2024, primarily driven by decreased sales volume of EH216 series products [31][32] - Gross profit was RMB 16.3 million in Q1, with a gross margin improvement to 62.4% compared to 61.9% in Q1 2024 and 60.7% in Q4 2024, indicating strong marketing competitiveness and pricing power [32][33] - Adjusted net loss was RMB 31.1 million in Q1, reflecting a decline in deliveries, but the company expects financial performance to improve as deliveries recover [34][35] Business Line Data and Key Metrics Changes - In Q1 2025, the company delivered 11 units of the EH216S, with low delivery volume attributed to seasonal slowdown, internal budgeting processes, and customers delaying orders until after the OC was granted [14][15] - The company is expanding its Yunfu production base, which has doubled in size and will support an annual production capacity of up to 1,000 units once fully operational [15][16] Market Data and Key Metrics Changes - Following the issuance of operating certificates (OC), consumer inquiries and order volumes have significantly increased, with expectations for a strong rebound in Q2 [17][18] - Major orders from provinces such as Jilin, Jiangxi, Guizhou, Hainan, Anhui, and Guangdong are moving forward and will begin converting into deliveries starting in Q2 [18][39] Company Strategy and Development Direction - The company aims to evolve from manufacturing autonomous aerial vehicles into a comprehensive urban air mobility platform operator, focusing on safety and a phased approach to commercialization [6][7] - The company is actively building partnerships and expanding into logistics and emergency rescue applications, with ongoing projects in various regions [24][25][26] Management Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's growth momentum, maintaining the full-year revenue guidance of RMB 900 million for 2025 despite Q1 performance decline [35][39] - The company is focused on continuous innovation and maintaining technological leadership, with significant investments in R&D and a strong pipeline of new products [12][13][33] Other Important Information - The company holds over 700 issued and pending patent assets worldwide, with nearly half of its team dedicated to R&D [12] - The company has established strategic partnerships to develop next-generation manufacturing bases and enhance its operational capabilities [22][23] Q&A Session Summary Question: Outlook on significant growth in sales and deliveries - Management noted that Q1 performance declined due to seasonal impacts and customer budget finalization, but improvements in Q2 delivery volumes and sales are expected [37][38] Question: Timeline for EH216 owners to obtain OC certificates - Management indicated that the issuance of OC clarifies regulatory standards, which should reduce application timelines for future operators [40][41] Question: Competition and product differentiation - Management emphasized that urban air mobility and intercity transport serve different markets, with the EH216S offering a compact footprint and lower costs compared to competitors [43][44][45] Question: Delivery growth expectations - Management confirmed strong sales growth in Q2 and expects significant revenue increases in the second half of the year as deliveries ramp up [73][75] Question: Production capacity updates - Management provided updates on the expansion of the Yunfu facility, which is expected to reach an annual production capacity of 1,000 units by the end of the year [80][81] Question: Perception of NDRC's recent statements - Management reiterated the importance of safety and a phased approach to operations, aligning with NDRC's guidance on developing the low altitude economy [85][86]

Core Viewpoint - EHang Holdings Limited reported its unaudited financial results for the first quarter of 2025, highlighting significant developments in urban air mobility, including the issuance of Air Operator Certificates for its EH216-S eVTOL and ongoing advancements in its VT35 model [1][15][16]. Financial Highlights - Total revenues for Q1 2025 were RMB 26.1 million (US$ 3.6 million), a decrease from RMB 61.7 million in Q1 2024 and RMB 164.3 million in Q4 2024, primarily due to reduced sales volume of EH216 series products [7][19]. - Gross margin improved to 62.4%, up from 61.9% in Q1 2024 and 60.7% in Q4 2024, attributed to a higher average selling price of EH216 series products [21][22]. - Operating loss was RMB 89.9 million (US$ 12.4 million), compared to RMB 65.8 million in Q1 2024 and RMB 56.0 million in Q4 2024 [24]. - Net loss was RMB 78.4 million (US$ 10.8 million), an increase from RMB 63.4 million in Q1 2024 and RMB 46.9 million in Q4 2024 [26]. - Cash and cash equivalents, along with short-term investments, totaled RMB 1,114.4 million (US$ 153.6 million) as of March 31, 2025 [28]. Business Developments - The Civil Aviation Administration of China (CAAC) issued Air Operator Certificates for EH216-S operators, allowing commercial human-carrying flight services in China [3][15]. - EHang is expanding its Yunfu production base to double its factory space to 48,000 square meters, aiming to increase annual production capacity to 1,000 units by the end of 2025 [8]. - The VT35, a next-generation eVTOL, is undergoing type certification with the CAAC, with the first unit manufactured for airworthiness validation tests [5][6]. - EHang has established a strategic partnership to build a new eVTOL production base in Hefei, integrating automation and standardization to meet rising demand [9]. International Expansion - EH216-S flights have commenced in Mexico and Spain, expanding EHang's global presence to 19 countries [12]. - The company launched the Luohu UAM Exhibition and Experience Center in Shenzhen, enhancing urban low-altitude infrastructure for tourism [11]. Management Insights - The CEO emphasized the significance of the Air Operator Certificates as a milestone for commercial urban air mobility in China [15]. - The CFO noted a revenue decline due to the timing of customer procurement plans but expressed optimism for a rebound in Q2 2025 [18].

Investment Rating - The report maintains an "Outperform" rating for the low-altitude economy industry as of May 25, 2025 [1]. Core Insights - The low-altitude economy sector has received significant attention from the national government, with policies aimed at fostering development and financial integration in technology sectors, particularly focusing on low-altitude economy projects [6][20]. - The industry has seen a decline in performance, with the Wande Low Altitude Economy Index dropping by 2.12%, underperforming compared to major indices such as the Shanghai Composite and CSI 300 [6][14]. - Key events include the World Drone Conference and UASE Drone Exhibition, showcasing advancements in low-altitude technologies and applications across various sectors [6][26]. Summary by Sections Market Review - From May 12 to May 25, 2025, the low-altitude economy sector underperformed the market, with significant declines in relevant indices compared to the Shanghai Composite and CSI 300 [6][14]. Policy Dynamics - The Ministry of Industry and Information Technology emphasized the importance of the low-altitude economy, announcing initiatives to deepen financial integration and support for high-quality project development [20]. - Local governments, such as Sichuan and Tianjin, have introduced policies to support low-altitude economic development, including funding for infrastructure and technology advancements [21][22]. Industry Dynamics - The Civil Aviation Administration of China reported a 15.4% year-on-year increase in drone flight hours, indicating growth in the sector [23][24]. - The establishment of the International Low Altitude Economy Cooperation Alliance aims to enhance global collaboration and resource integration within the low-altitude economy [38]. Investment Recommendations - The report suggests focusing on four main lines of investment: components, complete machines, infrastructure support, and air traffic management operations, highlighting specific companies within these categories [8].