EHang (EH) Conference Call Summary Company Overview - **Company**: EHang (EH) - **Industry**: eVTOL (Electric Vertical Takeoff and Landing) Aviation Key Points Commercialization and Market Expansion - EHang's management is optimistic about the ongoing commercialization of eVTOL across various end markets, having trained approximately 100 eVTOL operators aiming to obtain their operator licenses by 2026E [1][2] - The company has received 2 Operator Certificates (OCs) in the Chinese market and is actively pursuing expansion into overseas markets, specifically targeting the deployment of over 100 eVTOLs in Thailand by the end of 2026E [1][2] Strategic Focus - EHang's strategy emphasizes eVTOL commercial operations, assisting clients with obtaining OCs, and expanding production capacity, particularly at the Yunfu factory, which is projected to increase output to 1,000 units per year [2] - Management expresses a positive outlook on rising demand for eVTOL applications, including Urban Air Mobility (UAM), logistics, delivery, and emergency rescue services [2] Financial Projections and Valuation - EHang is rated as a "Buy" with a 12-month target price of $22.80, indicating a potential upside of 57.7% from the current price of $14.46 [3][8] - The target price is based on a discounted cash flow (DCF) methodology, projecting a free cash flow (FCF) growth rate of 10% year-over-year from 2028E to 2030E, with a terminal growth rate of 3% [3] Risks and Challenges - Key risks identified include: 1. Slower-than-expected regulatory progress regarding airworthiness of AAVs in China [4] 2. Weaker-than-anticipated customer adoption of passenger-grade AAVs and aerial transportation [4] 3. Delays in fulfilling AAV pre-orders [4] 4. Increased competition in the AAV market, which could negatively impact earnings estimates [7] Financial Metrics - Market capitalization: $849.9 million - Revenue projections (RMB million): - 2024: 456.2 - 2025E: 482.6 - 2026E: 972.1 - 2027E: 1,516.9 - EBITDA projections (RMB million): - 2024: (270.3) - 2025E: (298.9) - 2026E: 25.7 - 2027E: 323.0 - EPS projections (RMB): - 2024: (3.45) - 2025E: (3.84) - 2026E: (0.11) - 2027E: 3.78 [8] Conclusion - EHang is positioned to capitalize on the growing eVTOL market with a strong focus on commercialization and international expansion. However, the company faces several regulatory and market adoption risks that could impact its growth trajectory. The current valuation suggests significant upside potential, making it a compelling investment opportunity.

Core Viewpoint - EHang Holdings Limited has appointed Mr. Shuai Feng as Chief Technology Officer, marking a significant step in the company's technology strategy and management framework [1][7]. Company Leadership and Technology Development - Mr. Huazhi Hu, the founder and CEO, has led EHang's core technology development since its inception, overseeing R&D, production, quality systems, and supply chain integration [2]. - Mr. Feng has been a key member of the founding team since July 2014, contributing to the development of several pilotless eVTOL products, including the EH184 and EH216-S [3][4]. Commercialization and Supply Chain Management - As EHang enters a new phase of commercialization, Mr. Feng has taken on significant responsibilities in procurement and supply chain management, enhancing product efficiency and industry-chain integration [5]. - Mr. Feng also serves as the Compliance Officer, ensuring adherence to the company's principles of safety, compliance, innovation, and sustainability [5]. Educational Background and Industry Influence - Mr. Feng graduated from Tsinghua University with a specialization in UAV technology and has received multiple honors, including the Grand Prize in the "Challenge Cup" competition [6]. - He holds various leadership roles in academic and industry organizations, which will support the execution of EHang's technology strategy [6]. Future Vision and Commitment - Mr. Hu emphasized that Mr. Feng's appointment ensures continuity in the company's core technology strategy and talent development as EHang expands globally [7]. - Mr. Feng expressed gratitude for the trust placed in him and committed to integrating technology development with manufacturing and quality control to enhance execution and production efficiency [7]. Company Overview - EHang is a leader in advanced air mobility technology, focusing on safe, autonomous, and eco-friendly air mobility solutions, including a range of pilotless eVTOL aircraft for various applications [8]. - The flagship model, EH216-S, has achieved significant certifications, including the world's first type and production certificates for pilotless eVTOLs, and is now operational under the first Air Operator Certificates in China [8].

Core Insights - Guangdong's low-altitude economy has surpassed 100 billion, with over 15,000 related enterprises, accounting for more than 30% of the national total, and leading the global market in consumer and industrial drones [1][2][4] Group 1: Industry Overview - The low-altitude economy in Guangdong is characterized by innovative applications such as flying cars and drones, with significant advancements in technology and production capabilities [2][4] - Major players like EHang and XAG are leading the market, with EHang becoming the first profitable eVTOL company globally, and XAG's agricultural drones enhancing farming efficiency [2][3] Group 2: Market Dynamics - The consumer drone sector is dominated by DJI, which holds a substantial market share, while emerging companies like Yingshi are providing diverse aerial experiences [3] - The product matrix of Guangdong's low-altitude economy spans various applications, from agriculture to urban commuting, showcasing the versatility and innovation of "Guangdong-made" products [3][6] Group 3: Enabling Factors - The growth of Guangdong's low-altitude economy is supported by policies that provide financial and technical assistance, creating a conducive environment for innovation [4][5] - A robust supply chain with over 2,000 manufacturing companies in the region underpins the industry's strength, facilitating the development of core components and complete systems [4] - Continuous infrastructure improvements, including the establishment of general airports and flight service stations, enhance operational capabilities and streamline airspace management [4][6]

Market Overview - US stock indices opened lower, with the Dow Jones down 0.5%, Nasdaq down 1.2%, and S&P 500 down 0.82% [1] - Major tech stocks, including Nvidia, Tesla, Facebook, and Amazon, all experienced declines, with Nvidia dropping over 2% and others falling more than 1.5% [3] Chinese Stocks - Most Chinese stocks saw gains, with the Nasdaq Golden Dragon China Index up 0.31%. Bilibili rose nearly 5%, while Pony.ai and EHang increased over 3%. Alibaba gained 2.9% [3] - Ctrip's stock fell nearly 16%, resulting in a market value loss of $7.88 billion (approximately 55 billion RMB), bringing its total market value to $41.6 billion. This decline is linked to an investigation by the State Administration for Market Regulation regarding alleged monopolistic practices [3] Precious Metals - Silver prices surged, with spot silver reaching a historic high of $92 per ounce, marking a 5.45% increase for the day and over 28% year-to-date [4] - Gold also hit a record high of $4,641.853 per ounce, although its daily increase narrowed to 0.39% [4] - Citigroup strategists have raised their three-month price targets for gold to $5,000 per ounce and silver to $100 per ounce, citing geopolitical risks, persistent physical market shortages, and concerns over the independence of the Federal Reserve as key factors [5] Geopolitical Factors - The recent rise in precious metals is attributed to heightened geopolitical tensions, particularly between the US and Iran, which have increased risk aversion among investors. However, there are concerns regarding insufficient monetary policy support, as the core CPI in the US was slightly below expectations and the probability of a rate cut by the Federal Reserve in January is less than 5% [6] Oil Market - International oil prices saw a slight increase, with WTI and Brent crude both rising by nearly 1% [7] Legal Developments - The US Supreme Court has not yet ruled on the legality of the Trump administration's tariff policies, with the decision postponed to January 14. This follows previous rulings by lower courts deeming the tariff measures illegal [8]

Core Insights - The low-altitude economy is entering a significant order year in 2025, highlighted by major orders from companies like Xiaopeng Huitian and Volant Aviation, marking a record in overseas bulk orders for flying cars [1][9] - Financing in the low-altitude sector is increasingly characterized by "plus" rounds, indicating a trend where startups are seeking additional funding to maintain valuations amid a cooling investment climate [2] - The financing pace has slowed in 2025, but the proportion of billion-level projects has increased, showcasing a "head effect" where leading companies attract more investment [3] Financing Trends - Zero Gravity Aircraft Industry completed an A++++ round of financing amounting to nearly 300 million RMB, while Volant Aviation also secured similar funding, indicating a trend of startups relying on external financing during product certification stages [2][5] - Volant Aviation's financing history shows a series of successful rounds, including a B round of several hundred million RMB led by Huaying Capital and a B+ round shortly after, demonstrating strong investor interest [3][4] - Zero Gravity Aircraft has completed at least eight rounds of financing, with a total amount nearing 700 million RMB, supported by various investment institutions [5][6] Order Developments - In the Middle East, significant orders have been placed, including 600 flying cars by Xiaopeng Huitian and 350 eVTOLs by Times Technology, reflecting the region's favorable regulatory environment for new technologies [9][10] - Domestic orders are also on the rise, with Volant Aviation securing orders worth 3 billion RMB for 120 aircraft from Agricultural Bank of China Leasing and EHang announcing orders for 50 EH216-S drones [10][11] Policy and Industry Support - Beijing and Shanghai have introduced action plans to boost the low-altitude economy, aiming for substantial industry growth by 2027, with Beijing targeting a scale of 100 billion RMB and Shanghai 50 billion RMB [11][12] - Shenzhen has enacted the first special regulations for promoting the low-altitude economy, establishing a 2 billion RMB fund to support the entire industry chain, including R&D and manufacturing [12]

Group 1 - The core message highlights the impact of the increase in financing margin ratios by the Shanghai and Shenzhen Stock Exchanges, leading to a decline in major indices and a weakening of the low-altitude economy and commercial aerospace sectors [1] - EHang Intelligent has made significant progress in low-altitude economic trials, including the first emergency response flight in Europe and the assembly of its firefighting version EH216-F, marking a strong start in low-altitude emergency rescue equipment manufacturing [1] - The EHang EH216 series successfully completed point-to-point flights across the Qiongzhou Strait, validating technology and enhancing efficiency for low-altitude transportation coordination between Hainan and Guangdong [1] Group 2 - Guotai Junan analysis indicates that the low-altitude economy in China saw active investment and financing dynamics in December, with the release of a notification supporting financial backing for the Guangdong low-altitude economic cluster [2] - The "Twelve Articles" on low-altitude finance focus on the financial needs of low-altitude economic clusters, aiming to create a comprehensive and specialized financial service system to boost the industry [2] - The Huaxia Aviation ETF (159230) tracks the national aviation industry index, with a focus on low-altitude economy, covering various sectors including aircraft manufacturing and operational services, with low-altitude economic content at 88.26% and drone content at 89.46% [2]

Core Insights - The article discusses the potential and challenges of electric Vertical Take-Off and Landing (eVTOL) aircraft, particularly in the context of the low-altitude economy in China and global developments in the industry [1][3]. Domestic Focus - By 2025, China's low-altitude economy is expected to reach a market size of 1.5 trillion yuan, but concerns regarding safety standards, airspace management, and cost control persist among consumers and industry professionals [3]. - Cities in China, such as Chengdu, are actively exploring eVTOL integration with airport operations, conducting test flights to optimize airspace planning [7][8]. Global Focus - Multiple governments and companies plan to launch eVTOL passenger services in cities like Dubai, New York, and Los Angeles by 2026, with manufacturers like Joby and Archer competing for model certification [3][4]. - eVTOL's commercial viability remains uncertain, with some manufacturers facing bankruptcy while others, like EHang, have achieved certification for commercial operations [4]. Application Scenarios - The most feasible short-term application for eVTOL is airport transfers, which could enhance service offerings for airlines and airports, provided a seamless travel experience is delivered [4][8]. - The integration of eVTOL operations at airports faces challenges, particularly in airspace management during takeoff and landing, necessitating collaboration among stakeholders [5][7]. Operational Challenges - Key operational challenges include the need for designated takeoff and landing areas at airports, which must be strategically located to ensure efficient passenger transfers [5][8]. - Initial estimates suggest that a large airport with six eVTOL landing sites could attract just 2% of long-haul business and first-class travelers to sustain operations [8][11]. Fleet and Demand Projections - The estimated fleet size for eVTOL at major airports could grow from approximately 15 to 50 aircraft, depending on operational needs and airspace design [11][18]. - Each eVTOL could serve around 150 to 500 passengers daily, representing 0.5% to 2% of the total long-haul business and first-class traveler volume at large international airports [13][14]. Pricing and Cost Structure - Initial pricing for eVTOL services is expected to align with helicopter transfer costs, with potential reductions as operational scales increase [14][19]. - The cost structure for eVTOL operations includes takeoff fees, maintenance, depreciation, operational costs, and management expenses, which will influence pricing strategies [19][20]. Strategic Actions for Stakeholders - Airports need to reserve adequate space for eVTOL operations and collaborate with regulatory bodies for airspace integration [21][23]. - Airlines must integrate eVTOL services into their core processes, ensuring a seamless travel experience for high-end customers [22][23]. - Manufacturers should focus on developing fast-charging solutions and enhancing the reliability of components to reduce operational costs and improve service efficiency [23][24].

Group 1: Industry Overview - Guangzhou Huangpu aims to create a "trillion-level low-altitude economy" with over 50 core enterprises in the low-altitude economic industry, achieving a scale of approximately 13.4 billion RMB [3][5] - The region has 13 specialized "little giant" enterprises, 3 single champion enterprises, and 9 listed companies, making it one of the most important low-altitude economic clusters in China [3][5] Group 2: Company Developments - EHang Intelligent has received the world's first model certificate, production license, and airworthiness certificate for its EH216-S autonomous passenger aircraft, which has been operational in 21 countries with over 40 operational points and a zero-accident safety record [1][3] - The company is expanding its applications with the new long-range model VT35, designed for intercity travel scenarios in the Guangdong-Hong Kong-Macao Greater Bay Area [3] - Guangdong Gaoyu Technology, incubated by GAC Group, is focused on the research, production, and sales of flying cars, with its factory in Huangpu expected to enter trial production soon [5] - Guangzhou Tunan Software Technology is developing an integrated low-altitude service management platform utilizing big data and AI, which includes a customs supervision application for low-altitude logistics [5][6] Group 3: Technological Innovations - Guangdong Feixingpai Technology's eVTOL "Zhuque" drone aims to serve various scenarios such as intercity travel and emergency response, leveraging long-range and high safety features [3][5] - Zhonglei Electric Technology focuses on microwave and millimeter-wave phased array radar technology for low-altitude monitoring, providing safety surveillance for designated flight paths [6]

Core Insights - The article discusses the rapid development of the low-altitude economy in Guangzhou, highlighting the ambition to create a "Sky City" with a focus on unmanned aerial vehicles (UAVs) and commercial aerospace [1][3]. Group 1: Company Developments - EHang Intelligent has successfully completed flights in 21 countries and operates over 40 locations globally, with its EH216-S UAV being the first to receive certification from the Civil Aviation Administration of China [1]. - EHang's logistics UAV has conducted multiple flights on the "Zhuhai-Guangzhou Huangpu" low-altitude logistics route, exploring integrated operations of passenger and cargo transport [1]. - The company has introduced a new long-range model, the VT35, designed for distances exceeding 200 kilometers, targeting intercity travel scenarios in the Guangdong-Hong Kong-Macao Greater Bay Area [1]. Group 2: Government Initiatives - The Guangzhou municipal government has issued plans to significantly develop the low-altitude economy and commercial aerospace, aiming to establish a civil unmanned aerial vehicle testing zone and foster new technologies and business models in the sector by 2035 [3]. - The goal is to create a globally influential "Sky City" and cultivate leading enterprises in the commercial aerospace field [3]. Group 3: Industry Landscape - Guangdong has established a comprehensive low-altitude economy industrial chain, with over 15,000 related companies, accounting for more than 30% of the national total, and has surpassed 100 billion yuan in output value [4]. - The financing scale of core enterprises in Guangdong's low-altitude economy is nearly 50 billion yuan, representing about 60% of the national total [4]. - Tunan Software is developing an integrated low-altitude service management platform based on big data and artificial intelligence, which includes features for airspace resource allocation and dynamic risk adjustment [4].

Core Viewpoint - The article highlights the successful test flight of the EHang 216 eVTOL powered by the Falcon solid-state lithium metal battery, marking a significant milestone in the application of advanced battery technology in aviation [2][4]. Group 1: Battery Technology - The Falcon solid-state lithium metal battery has an energy density exceeding 480 Wh/kg, which is 1.5 to 2 times higher than existing mainstream aviation batteries [4]. - The battery utilizes HICORE solid-state electrolyte technology and interface-oriented TIE technology to enhance ionic conductivity while reducing leakage and combustion risks [4]. - The design of the lithium metal anode achieves a volumetric energy density of 1200 Wh/L, and the battery has passed various safety tests, ensuring reliability for cross-sea flights [4]. Group 2: Project Development - On December 29, 2025, the first batch of solid-state cylindrical batteries from a 10 GWh production project by the company was launched in Hangzhou, with an initial capacity of 2 GWh aimed at consumer electronics [5]. - The second phase of the project plans to add 8 GWh of capacity, targeting eVTOLs, humanoid robots, and electric vehicles [5]. - A new project in Zhongshan, Guangdong, with a total investment of 160 million yuan, aims to establish a production line for 0.25 GWh of lithium metal solid-state batteries by 2026 [5]. Group 3: Collaboration and Future Plans - The company began collaborating with EHang in early 2023 to develop the eVTOL power system, achieving a record flight duration of 48 minutes and 10 seconds during their first test flight in November 2024 [4]. - The partnership has focused on optimizing battery output characteristics and thermal control for challenging maritime conditions, ensuring temperature increases do not exceed 18°C during flights [4]. - The company plans to mass-produce the next-generation "Falcon 2.0" solid-state battery by the end of 2026, with an expected energy density exceeding 500 Wh/kg [5].