Investment Rating - The report maintains a BUY rating for EHang Holdings with an unchanged target price of US$30, indicating a potential upside of 33.6% from the current price of US$22.45 [3][24]. Core Insights - EHang's net loss in 4Q24 narrowed by 35% year-over-year (YoY) to RMB47 million, supported by a significant increase in electric vertical take-off and landing (eVTOL) aircraft deliveries, which grew 2.4 times YoY [1][8]. - For 2025, EHang targets revenue of RMB900 million, suggesting a 97% YoY growth, and is positioned as the first manufacturer in China to obtain essential certifications for mass production of eVTOL aircraft, ahead of competitors by 1-2 years [1][8]. - The potential approval of operator certification for its subsidiaries is expected to be a key catalyst for share price movement [1]. Financial Performance Summary - In FY24, EHang's revenue surged 2.9 times YoY to RMB456 million, while the net loss narrowed by 24% YoY to RMB230 million [2][19]. - The company achieved positive operating cash flow for five consecutive quarters, with net cash and short-term investments totaling RMB1 billion at the end of 2024 [1][8]. - Revenue projections for FY25E and FY26E are RMB899 million and RMB1,341 million, respectively, with corresponding YoY growth rates of 97% and 49.2% [2][19]. Delivery and Expansion - EHang delivered 78 units of the EH216 series in 4Q24, contributing to a total of 216 units delivered in FY24, representing a 3.1 times YoY increase [1][8]. - The company is expanding its market presence both domestically and internationally, securing new orders in China and expanding flight operations to 16 cities in Japan, Thailand, and Mexico [1][8]. Share Performance and Market Data - EHang's market capitalization is approximately US$1.42 billion, with an average turnover of US$41.8 million over the past three months [3]. - The stock has shown significant performance over the past six months, with an increase of 85.4% [5].

Financial Data and Key Metrics Changes - In Q4 2024, EHang delivered 78 units of the EH216 series, generating revenues of RMB164 million, a 239.1% year-over-year increase [12] - For the full year 2024, total deliveries reached 216 units with revenues of RMB456 million, marking a 288.5% year-over-year increase [12] - The company achieved positive adjusted net income and positive operating cash flow for the first time in its history [12] - Q4 gross margin was 60.7%, slightly down from 64.7% in Q4 2023, while the full-year gross margin was 61.4%, down from 64.1% in 2023 [45] - Adjusted operating income for Q4 was RMB27.9 million, a significant improvement from an adjusted operating loss of RMB24.9 million in Q4 2023 [48] Business Line Data and Key Metrics Changes - The EH216-S autonomous eVTOL received significant orders, including a 30-unit order from Shandong province and another 30-unit order from Zhejiang province [27] - The company is focusing on enhancing production efficiency and scaling production capabilities to meet growing demand [28] Market Data and Key Metrics Changes - EHang has established over 20 eVTOL operational demonstration sites and e-ports across 16 cities in China [15] - The company is expanding its presence in international markets, conducting flights in countries like Thailand, Japan, Spain, and Mexico [39] Company Strategy and Development Direction - EHang aims to launch operational demonstration projects in key cities to allow public experience of eVTOL flights [16] - The company is committed to advancing AI technology integration within its operations and products [18] - EHang plans to develop a complete lifecycle value system for customers, including hardware, services, and operations [85] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand for eVTOL products and operational services, expecting total revenue for 2025 to reach RMB900 million, a 97% increase year-over-year [42] - The company is focused on safety and regulatory compliance as it prepares for commercial operations [32] Other Important Information - EHang has partnered with various universities and government departments to advance digital technologies in the low-altitude aviation industry [20] - The company is developing next-generation high-energy solid-state lithium batteries and has achieved significant progress in testing [21] Q&A Session Summary Question: Production capacity expansion for Hefei facility - Management confirmed that the Yunfu Phase 2 will reach an annual capacity of 1,000 units by the end of 2025, with specialized focuses for different production lines [55][56] Question: Timeline for OC application and GAAP profitability - Management expects to receive OC approval soon and anticipates achieving GAAP profitability in 2026, with a CapEx guidance of approximately $14 million for 2025 [66] Question: Gross margin outlook and financing plans - Management targets a gross margin around 60% and plans to seek additional financing to support market expansion and new product development [72] Question: Air taxi operation timeline - Management indicated that air taxi services will be established in domestic tourism areas first, with infrastructure development being a key factor [77] Question: Update on overseas market and revenue diversification - Management reported strong domestic demand with intention orders exceeding 1,000 units and emphasized a dual strategy of operations and sales to diversify revenue streams [90][85]

Financial Data and Key Metrics Changes - In Q4 2024, the company delivered 78 units of the EH216 series, generating revenues of RMB164 million, a year-over-year increase of 239.1% [12] - For the full year 2024, total deliveries reached 216 units with revenues of RMB456 million, marking a 288.5% year-over-year increase [12] - The company achieved positive adjusted net income and positive operating cash flow for the first time in its history [12][49] - Q4 gross margin was 60.7%, slightly down from 64.7% in Q4 2023, while the full-year gross margin was 61.4%, down from 64.1% in 2023 [45] Business Line Data and Key Metrics Changes - The EH216-S autonomous messenger received significant orders, including a 30-unit order from Shandong province and another 30-unit order from Zhejiang province [27] - The company is focusing on enhancing production efficiency and scaling production capabilities to meet growing demand [28] Market Data and Key Metrics Changes - The low-altitude economy was highlighted as a strategic emerging industry in China's 2025 government work report, emphasizing the need for large-scale demonstration projects [13][14] - EHang has established over 20 operational demonstration sites and e-ports across 16 cities in China [15] Company Strategy and Development Direction - The company aims to launch operational demonstration projects in key cities in 2025, focusing on public experience with eVTOL flights [16] - EHang plans to deepen its AI Plus strategy, integrating AI across the eVTOL lifecycle to enhance operational efficiency [19] - The company is collaborating with universities and government departments to build a smart low-altitude ecosystem [20] Management's Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand for eVTOL products and operational services, expecting total revenue for 2025 to reach RMB900 million, a 97% increase year-over-year [42] - The company anticipates achieving GAAP profitability in 2026, with quarterly profitability expected in the second half of 2024 [66] Other Important Information - EHang has completed flight demonstrations in multiple countries, expanding its global footprint to 19 countries [82] - The company is actively exploring innovative approaches to expedite international operations of its eVTOLs [84] Q&A Session Summary Question: Production capacity expansion for Hefei facility - Management confirmed that the Yunfu Phase 2 expansion will reach a total annual capacity of 1,000 units by the end of 2025 [55] Question: Timeline for OC application and GAAP profitability - Management stated that the CAAC has completed inspections for two applicants and is awaiting final approval, with GAAP profitability expected in 2026 [62][66] Question: Gross margin outlook and financing plans - Management targets a gross margin around 60% and plans to seek additional financing to support growth initiatives [70][72] Question: Air taxi operation timeline - Management indicated that air taxi services will be established in domestic tourism areas first, with infrastructure development being a key factor [77] Question: Update on new orders and collaboration with JAC - Management reported strong domestic demand with intention orders exceeding 1,000 units and discussed the JV with JAC for eVTOL production [89][91] Question: Trends in R&D expenses for 2025 - Management expects sales and R&D expenses to grow, but revenue growth will outpace expense growth, leading to a declining ratio of SG&A to revenue [96] Question: Battery technology and VT-35 updates - Management is pursuing advancements in fast-charging and solid-state batteries, with the VT-35 prototype in final assembly and testing [100][102]

Financial Data and Key Metrics Changes - In Q4 2024, the company delivered 78 units of the EH216 series, generating revenues of RMB 164 million, representing a year-over-year increase of 239.1% [6] - For the full year 2024, total deliveries reached 216 units, with total revenue of RMB 456 million, marking a year-over-year increase of 288.5% [6][27] - The company achieved positive adjusted net income for the first time, with an annual adjusted net income of RMB 43.1 million, a significant improvement from an adjusted net loss of RMB 139 million in 2023 [30] - The gross margin for Q4 was 60.7%, slightly down from 64.7% in Q4 2023, while the annual gross margin for 2024 was 61.4%, down from 64.1% in 2023 [27][28] Business Line Data and Key Metrics Changes - The EH216S autonomous eVito received significant orders, including 30 units from Shandong province and 30 units from Zhejiang province, contributing to the record deliveries in Q4 [16] - The company is focusing on enhancing production efficiency and scaling production capabilities to meet growing order demands [16][17] Market Data and Key Metrics Changes - The low altitude economy was highlighted as a strategic emerging industry in China's government work report, with local governments in over 50 cities introducing development plans for the sector [7][8] - The company has established over 20 operational demonstration sites across 16 cities in China, indicating strong market penetration [9] Company Strategy and Development Direction - The company aims to launch operational demonstration projects in key cities to allow the public to experience eVito flights firsthand [10] - The focus for 2025 includes expanding urban air mobility (UAM) operations and developing a comprehensive low altitude economy flight service system [21][22] - The company is committed to advancing technological innovation and operational demonstration of pilotless vehicles, aiming to lead the transformation of urban air mobility [15] Management Comments on Operating Environment and Future Outlook - Management expressed optimism about the strong demand for eVito products and operational services, projecting total revenue for 2025 to reach RMB 900 million, representing a 97% year-over-year increase [24][32] - The company is actively pursuing international market expansion, with flight demonstrations conducted in multiple countries, including Thailand, Japan, and Spain [23][55] Other Important Information - The company has achieved its first-ever annual positive operating cash flow of approximately RMB 160 million in 2024, demonstrating sustainable cash generation capabilities [31] - The company plans to invest in scaling production capacity and developing new models for emergency response and logistics [42][47] Q&A Session Summary Question: What is the added production capacity for the Hefei production facility by the end of 2025 and 2026? - The company plans to complete the capacity expansion for Yunfu Phase II this year, reaching a total annual capacity of 1,000 units [34][35] Question: What is the timeline for the IOC application and milestones expected? - The CAAC has completed inspections for two applicants, and the company is awaiting final regulatory approval, which will enable commercial operations [39][40] Question: When will the company achieve GAAP profitability? - The company expects to achieve quarterly GAAP profitability in the second half of 2024, with full-year GAAP profitability anticipated in 2026 [42] Question: What is the outlook for gross margin and financing plans in 2025? - The targeted gross margin is around 60%, with plans to diversify product offerings to support this goal [45][46] Question: What is the progress on the next generation lithium batteries and the VT35 product? - The company is pursuing fast charging and solid-state battery developments, aiming for mass production by the end of the year [67]

Financial Performance - The company reported record-high quarterly revenues of RMB164.3 million (US$22.5 million), representing a 190.2% increase year-over-year from RMB56.6 million in Q4 2023 and a 28.2% increase from RMB128.1 million in Q3 2024 [11][28] - For the fiscal year 2024, total revenues reached RMB456.2 million (US$62.5 million), up 288.5% from RMB117.4 million in 2023, primarily driven by increased sales volume of EH216 series products [28] - The gross margin for Q4 2024 was 60.7%, slightly down from 64.7% in Q4 2023 and on par with 61.2% in Q3 2024 [16] - The company achieved its first year and third consecutive quarter of non-GAAP profitability, with adjusted net income of RMB36.4 million (US$5.0 million) in Q4 2024, a significant improvement from an adjusted net loss of RMB22.1 million in Q4 2023 [24][25] Operational Highlights - The company delivered a record-high of 216 units of EH216 series eVTOLs in 2024, a 315.4% increase from 52 units in 2023 [4] - The EH216 series eVTOL sales and deliveries in Q4 2024 reached 78 units, representing a 239.1% increase from 23 units in Q4 2023 [4] - The company expects fiscal year 2025 revenues to be around RMB900 million, reflecting a 97% year-over-year increase [40] Strategic Developments - EHang expanded its global presence, achieving the first-ever urban flight of a pilotless eVTOL in Europe and securing new orders from clients across multiple cities in China [5][10] - The company is collaborating with various partners to develop UAM infrastructure and low-altitude flight hubs, including a strategic partnership with China Communications Information & Technology Group [5] - EHang is also focusing on talent training by partnering with the Civil Aviation Flight University of China to address the demand for skilled professionals in the low-altitude economy sector [5] Management Insights - The CEO highlighted the achievements in 2024, emphasizing the acceleration of eVTOL adoption and the company's commitment to innovation and operational expansion [10] - The CFO noted the exceptional momentum in 2024, driven by unprecedented demand for the EH216-S and strategic execution in scaling production and preparing for commercial operations [10]

Summary of Key Points from the Conference Call Industry Overview - The low-altitude economy is expected to take off in 2025 with the issuance of the first operating licenses, leading to a new era in transportation [1] - The Global Urban Air Mobility (UAM) market is projected to grow from US$5 billion to US$24 billion by 2030, driven by commercial services [2] - The low-altitude economy encompasses various sectors including transport, logistics, agriculture, and emergency services [2] Market Dynamics - The cumulative order backlog for Electric Vertical Takeoff and Landing (EVTOL) aircraft has surpassed 18,000 units as of the end of 2024, reflecting a 27% year-over-year increase [2] - The global helicopter market has a Total Addressable Market (TAM) of US$40 billion, with EVTOL expected to be several times larger due to lower costs [2] Regulatory Environment - Regulatory support has been crucial, with favorable regulations and accelerated certification processes emerging since the second half of 2023 [3] - EHang is the only company to have received type, production, and airworthiness certificates from the Civil Aviation Administration of China (CAAC) [3][39] - In the US, companies like Joby and Archer are making significant progress in the certification process [3] Technological Advancements - Advances in battery technology, particularly in energy density and power density, have been key enablers for EVTOL development [4] - Current battery technology allows EVTOLs to carry 2-4 passengers over distances of 300 km, with future advancements expected to support ranges of 2,000-3,000 km [4] Cost Structure and Market Potential - EVTOLs are expected to significantly reduce travel costs compared to helicopters, with potential trip costs of US$0.5-1.5 per seat-km [5] - The initial use case for EVTOLs is anticipated to be tourism, expanding to mass transportation in congested areas over time [5] Competitive Landscape - Chinese companies benefit from regulatory support and lower costs, while US companies focus on long-haul transport [6] - EHang, with a market cap exceeding US$5 billion, is a leader in the EVTOL space, having achieved commercial deliveries [6] Investment Implications - The low-altitude economy is positioned as a disruptive technology, with the potential to open air travel to the masses [9] - The market for urban air mobility could grow to over US$40 billion by 2035, with EHang leading in regulatory approvals in Asia [9] Infrastructure and Support - The low-altitude economy requires critical infrastructure such as flight command-and-control centers, communication networks, and takeoff/landing platforms [20] - Local governments in China are providing substantial funding and subsidies to support the development of the low-altitude economy [52] Future Outlook - The integration of autonomous flight technology and AI is expected to enhance the efficiency and safety of low-altitude operations [26] - The market for EVTOLs is projected to grow significantly, with estimates of cumulative units in service ranging from 5,000 to 50,000 by 2030 [27] Conclusion - The low-altitude economy is on the verge of commercialization, driven by regulatory support, technological advancements, and significant market potential [9][20]

Core Viewpoint - EHang Holdings Limited, a leader in Urban Air Mobility technology, will release its unaudited financial results for Q4 and the fiscal year ending December 31, 2024, on March 12, 2025, before the U.S. market opens [1]. Group 1: Financial Results Announcement - The unaudited financial results will be released on March 12, 2025, before the U.S. market opens [1]. - An earnings conference call will be hosted by EHang's management team at 8:00 AM U.S. Eastern Time on the same day [2]. Group 2: Conference Call Details - Participants must complete an online registration process to join the conference call, receiving email instructions with dial-in information and a PIN number [2]. - A live and archived webcast of the conference call will be available on the Company's Investor Relations website [3]. Group 3: Company Overview - EHang is recognized as the world's leading Urban Air Mobility technology platform company, focusing on safe, autonomous, and eco-friendly air mobility solutions [4]. - The company provides unmanned aerial vehicle systems for various applications, including passenger transportation, logistics, smart city management, and aerial media solutions [4]. - EHang's flagship product, the EH216-S, has received the world's first type certificate, production certificate, and standard airworthiness certificate for pilotless eVTOL from the Civil Aviation Administration of China [4].

Core Viewpoint - EHang Holdings Limited has entered into a strategic cooperation framework agreement with JAC Motors and Guoxian Holdings to establish a joint venture in Hefei for the manufacturing of low-altitude aircraft, specifically intelligent and pilotless electric vertical takeoff and landing aircraft (eVTOL) [1][3][5] Group 1: Strategic Cooperation Details - The agreement focuses on R&D, manufacturing, and sales of eVTOL aircraft, aiming to enhance technological advancements and production capacity [3][4] - The partnership will integrate the new energy vehicle industrial chain in Hefei with aircraft manufacturing technology, promoting standardization and establishing unified industry standards [4][5] - The collaboration is expected to foster the development of a comprehensive industrial cluster and a multi-dimensional transportation ecosystem [4][5] Group 2: Contributions of Each Partner - JAC Motors will leverage its expertise in traditional automobile manufacturing to scale up and automate eVTOL production [5] - EHang will provide cutting-edge R&D and production technologies, along with experience in airworthiness certification and operations [5] - Guoxian Holdings will facilitate policy support and create a favorable development environment for the cooperation [5] Group 3: Government Support and Market Demand - Hefei municipal government has previously signed a strategic cooperation agreement with EHang, leading to the establishment of two UAM eVTOL operation centers [6] - The collaboration aims to meet the growing market demand for pilotless passenger-carrying aircraft and support the large-scale deployment of eVTOLs [6][7] - Hefei aims to be a key city in the national development of the low-altitude economy, providing support for technology development and standard formulation [7] Group 4: Future Outlook - The partnership is expected to drive high-quality growth in emerging industries and achieve mass production of low-altitude eVTOLs in Hefei [8] - EHang is committed to advancing a full-scale low-altitude air mobility ecosystem and strengthening the industrial chain for pilotless eVTOL products [8]

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Company Analysis - EHang Holdings Limited (NASDAQ: EH) has shown a strong adjusted operating revenue rebound of 1208.22% quarter-over-quarter (QoQ) [1] - The company's performance is driven by its strong financial recovery and growth potential [1] Analyst Background - The analyst specializes in technology, innovation, and sustainability investment, with a focus on emerging technologies and sustainable investing [1] - The analyst employs a "First Principles" approach to break down complex problems into basic financial and technological elements to uncover investment opportunities [1] - The analyst has a strong background in investment, private equity, and venture capital, with a proven track record of delivering strong returns [1]