EHang(EH) Zhao Yin Guo Ji·2025-05-27 01:23Investment Rating - The report maintains a "BUY" rating for EHang Holdings with an unchanged target price of US16.96 [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].