Investment Rating - The report initiates coverage on EHang Holdings (EH O) with a "Buy" rating and a target price of $22, corresponding to 12x 2025e P/S or 35x 2026e P/E [2] Core Views - EHang is a global leader in the Urban Air Mobility (UAM) sector, with its core products including the EH216-S passenger aircraft, EH216-F firefighting version, and EH216-L logistics version [1] - The company achieved revenue of RMB 117 million in 2023, a 165% YoY increase, driven by the sale of 52 EH216 series units, with 23 units sold in Q4 2023 [1] - The eVTOL market is projected to exceed RMB 500 billion in the medium term, with significant growth potential in both sales and operational markets [1] - EHang has a clear first-mover advantage, having secured the Type Certificate (TC) and Production Certificate (PC) for its EH216-S, positioning it ahead of competitors in regulatory approvals [1][37] - The company has secured hundreds of pre-orders from both domestic and international clients, including government and enterprise customers, with a current production capacity of 600 units per year [1][48] Industry Overview - The eVTOL market is expected to reach RMB 310 billion in operational revenue and RMB 200 billion in sales revenue in the medium term, driven by applications in tourism and commuting [1] - The report estimates that the operational profitability (OPM) for eVTOL in tourism scenarios could reach 35%, with a single machine generating annual revenue of RMB 2 million [25] - In the commuting market, a single route like Guangzhou-Foshan could generate annual revenue of RMB 28 billion, with a potential market size of RMB 2.8 trillion if 10 routes are established [29][30] - The sales market for eVTOL is projected to reach RMB 200 billion annually, assuming a delivery volume of 40,000 units at an average price of RMB 500,000 per unit [31] Company Strengths - EHang has secured significant government support and partnerships, including agreements with cities like Shenzhen, Guangzhou, Hefei, and Wuxi, which are actively promoting low-altitude economy ecosystems [1][43] - The company has a robust order book, with hundreds of pre-orders from both domestic and international clients, including a 100-unit order from Wuxi and a 100-unit order from the UAE [47] - EHang's production capacity is sufficient to meet near-term demand, with its Yunfu factory capable of producing 600 units annually [48] Financial Projections - The report forecasts EHang's revenue to grow to RMB 380 million, RMB 810 million, and RMB 1.27 billion in 2024, 2025, and 2026, respectively, driven by increased deliveries of the EH216 series [2] - Non-GAAP net profit is expected to improve from a loss of RMB 20 million in 2024 to profits of RMB 130 million and RMB 280 million in 2025 and 2026, respectively [2] - The company is expected to maintain a gross margin of around 60%, with operating margins improving significantly as sales scale up [50][51]
城市空中交通科技龙头，商业化落地在即