Core Viewpoint - The eVTOL industry is transitioning from pilot projects to commercial operations, with EHang's operational certificate marking a significant milestone in the low-altitude economy [1][27]. Industry Overview - The eVTOL industry is recognized as a leading sector in the low-altitude economy, with increasing commercial viability and consumer accessibility [1][27]. - EHang has received the first operational certificate for manned civil unmanned aerial vehicles in China, indicating the start of commercial low-altitude services [27][30]. Company Performance - In Q1 2025, EHang reported total revenue of 26.09 million yuan, a year-on-year decrease of 57.7% and a quarter-on-quarter decrease of 84.1% [2][3]. - The net profit attributable to shareholders was -78.08 million yuan, compared to -63.33 million yuan in the same period last year [2][3]. - The decline in revenue is primarily attributed to a reduction in sales of the EH216 series, with only 11 units delivered in Q1 2025, a decrease of 57.7% year-on-year and 85.9% quarter-on-quarter [2][3]. Financial Metrics - EHang's gross margin for Q1 2025 was 62.4%, showing a year-on-year increase of 0.6 percentage points, while the net margin was -300.4%, reflecting a significant year-on-year decline of 197.8 percentage points [13][2]. - The increase in gross margin is attributed to a rise in the average selling price of the EH216 series products [13][2]. Order and Production Capacity - EHang has over 1,500 units of the EH216 series in hand orders, with more than 1,200 new purchase and pre-orders from Q3 2023 to December 2024 [21][27]. - The company is expanding its production capacity, with plans to double the size of its Yunfu production base to 48,000 square meters and increase annual production capacity to 1,000 units by the end of 2025 [34][34]. Strategic Partnerships and Collaborations - EHang is collaborating with various partners to develop new technologies and infrastructure for eVTOL operations, including partnerships with universities and engineering firms [41][44]. - The company has signed strategic agreements with automotive manufacturers to explore the development of flying cars, expanding its product line for the consumer market [51][51]. Global Expansion - EHang has successfully completed over 66,000 safe flights across 19 countries, indicating its growing international presence [23][24]. - The company is actively pursuing market opportunities in Brazil, Thailand, Japan, and the UAE, with successful test flights and regulatory approvals in these regions [24][24]. Technological Advancements - EHang has made significant progress in solid-state battery technology, achieving a 60%-90% increase in flight duration compared to traditional lithium batteries [46][46]. - The company is also developing advanced integrated electric drive systems in collaboration with leading suppliers to enhance the performance of its eVTOL products [48][48].

Investment Rating - The report maintains an "Outperform" rating for the company [5]. Core Views - The company has received the first batch of operational certificates for manned civil unmanned aerial vehicles in China, marking the beginning of commercial operations in the low-altitude economy [2][31]. - The company has a robust order backlog, with over 1,500 units of the EH216 series aircraft on hand, and expects to receive more than 1,200 new orders from Q3 2023 to December 2024 [2][26]. - The company is expanding its production capacity, planning to double the size of its Yunfu production base to 48,000 square meters and increase annual production capacity to 1,000 units by the end of the year [2][39]. Financial Summary - In Q1 2025, the company reported revenue of 26.09 million yuan, a year-on-year decrease of 57.7% and a quarter-on-quarter decrease of 84.1% [1][8]. - The net profit attributable to shareholders was -78.08 million yuan, compared to -63.33 million yuan in the same period last year [1][8]. - The adjusted net profit (non-GAAP) was -30.82 million yuan, a significant decline from the previous year's -10.03 million yuan [1][8]. - The gross margin for Q1 2025 was 62.4%, showing an increase compared to the previous year [14]. Revenue and Profit Forecast - Revenue forecasts for 2025-2027 are set at 860 million yuan, 1.205 billion yuan, and 1.579 billion yuan, respectively, with expected growth rates of 88.4%, 40.2%, and 31.0% [4]. - The net profit forecasts for the same period are -143 million yuan, 61 million yuan, and 194 million yuan, reflecting a downward adjustment in profit expectations [4][3].

Investment Rating - The investment rating for the company is "Buy" with a 6-month outlook maintained [5]. Core Insights - The company reported a revenue of 26.1 million yuan in Q1 2025, down from 61.7 million yuan in the same period last year, with a gross margin of 62.4% compared to 61.9% year-on-year. The adjusted net loss was 31.1 million yuan, increasing from 10.1 million yuan year-on-year [1]. - The company has received the operational certificate (OC) for its EH216-S model, allowing for commercial flight services in designated areas. This certification is expected to accelerate the company's commercial operations and expand its market presence [2]. - The company is expanding its production capacity with plans to increase annual output to 1,000 units by the end of 2025, supported by the construction of a new production base in Yunfu and a strategic partnership in Hefei [4]. - The revenue guidance for 2025 is set at 900 million yuan, representing a year-on-year growth of 97%, with expectations of continued growth in revenue for the years 2025 to 2027 [4]. Business Progress - The company has successfully obtained the first batch of operational certificates for its EH216-S from the Civil Aviation Administration of China (CAAC), enabling commercial operations [2]. - The international market expansion includes successful test flights in Spain and Mexico, increasing the number of countries where the company operates to 19 [2]. Product Development - The new generation eVTOL, VT35, is currently undergoing airworthiness certification with the CAAC, and the prototype has completed manufacturing and is in the testing phase, with plans for release in Q3 2025 [3].

Core Viewpoint - The low-altitude economy in China is entering a critical period of policy support, with significant government initiatives and industry developments anticipated in 2024, marking it as a pivotal year for the sector [1][2]. Group 1: Industry Development - The low-altitude economy is characterized by the emergence of various applications, particularly in logistics and emergency rescue, with companies like Shenzhen United Aircraft Technology Co., Ltd. launching innovative products such as the "Platinum Shadow T1400" heavy-lift drone [2][8]. - The market size for China's low-altitude economy is estimated to be approximately 506 billion yuan in 2023, with projections suggesting it could reach 1 trillion yuan by 2026 [7]. - Companies like DJI have been applying drone technology in various sectors since 2013, with over 1 million users globally utilizing their products [8]. Group 2: eVTOL and Flying Cars - eVTOL (electric Vertical Take-Off and Landing) vehicles are seen as a significant component of the low-altitude economy, with companies like Xiaopeng Huaitian and GAC Gaoyu exploring commercial applications [12][16]. - The commercial viability of flying cars is expected to develop over the next five years, with initial offerings targeting the consumer market [15][16]. - The integration of automotive technology into eVTOL manufacturing is anticipated to reduce costs significantly, creating a more accessible market for low-altitude transportation [16]. Group 3: Infrastructure Challenges - The development of low-altitude infrastructure is lagging behind the rapid growth of the aviation sector, with calls for government involvement in establishing comprehensive support systems [19][20]. - Companies like Fengyu Technology are actively working on building low-altitude logistics networks, emphasizing the need for improved infrastructure such as communication and navigation systems [19]. - The establishment of a comprehensive management platform for low-altitude operations is crucial, as highlighted by industry leaders who stress the importance of regulatory frameworks and coordination among various stakeholders [22][23]. Group 4: Safety and Regulation - The low-altitude economy faces challenges related to safety and regulatory compliance, with industry experts calling for the development of a robust safety assurance system [25][26]. - As the scale of drone operations expands, the need for clear accountability and risk management strategies becomes increasingly important [25][26]. - Legal and regulatory frameworks are still evolving, with companies needing to navigate complex compliance issues as they scale their operations [26].

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 ...