Annual Gross Margin Reached 63.4%Special Conditions for the EH216-S Type Certification Adopted by the CAACOperational Trial Flights under the 100 Air Mobility Routes Initiative Expanded to Over 4,000 at 9 Spots in ChinaSizable AAV Pre-orders and Growing UAM Market Demand from More Asian Countries
GUANGZHOU, China, March 29, 2022 (GLOBE NEWSWIRE) — EHang Holdings Limited (“EHang” or the “Company”) (Nasdaq: EH), the world’s leading autonomous aerial vehicle (“AAV”) technology platform company, today announced its unaudited financial results for the fourth quarter and fiscal year ended December 31, 2021.
Financial and Operational Highlights for the Fourth Quarter 2021
Total revenues were RMB8.7 million (US$1.4 million), compared with RMB13.0 million in the third quarter of 2021. Gross margin was 60.1%, representing a continued high gross margin level and a minor decrease of 1.7 percentage points from the third quarter of 2021, mainly due to the changes in revenue mix. Operating loss was RMB106.1 million (US$16.6 million), compared with RMB73.3 million in the third quarter of 2021. Adjusted operating loss1 (non-GAAP) was RMB83.8 million (US$13.1 million), compared with RMB48.9 million in the third quarter of 2021. Net loss was RMB104.5 million (US$16.4 million), compared with RMB72.3 million in the third quarter of 2021. Adjusted net loss2 (non-GAAP) was RMB82.2 million (US$12.9 million), compared with RMB47.8 million in the third quarter of 2021. Cash, cash equivalents, restricted cash and short-term investments balances were RMB312.1 million (US$49.0 million) as of December 31, 2021, compared with RMB357.0 million as of September 30, 2021. Sales and deliveries of the EH216 AAVs were 4 units, compared with 8 units in the third quarter of 2021. Under the 100 Air Mobility Routes Initiative, over 4,000 operational trial flights of the EH216 have been conducted in practical scenarios at 9 operation spots to date.
Financial and Operational Highlights for the Fiscal Year 2021
Total revenues were RMB56.8 million (US$8.9million), compared with RMB180.1 million in 2020. Gross margin was 63.4%, an increase of 4.4 percentage points from 59.0% in 2020. Adjusted gross margin was 63.4%, an increase of 3.1 percentage points from 60.3% in 2020. Operating loss was RMB320.5 million (US$50.3 million), compared with RMB91.3 million in 2020. Adjusted operating loss (non-GAAP) was RMB199.4 million (US$31.3 million), compared with RMB36.4 million in 2020. Net loss was RMB313.9 million (US$49.3 million), compared with RMB92.0 million in 2020. Adjusted net loss (non-GAAP) was RMB192.8 million (US$30.3 million), compared with RMB37.2 million in 2020. Cash, cash equivalents, restricted cash and short-term investments balances were RMB312.1 million (US$49.0 million) as of December 31, 2021, compared with RMB189.4 million as of December 31, 2020. Sales and deliveries of the EH216 series AAVs were 30 units in 2021, compared with 70 units in 2020.
Updates on Certification
Since EHang’s application for the EH216-S3 Type Certification (“TC”) was officially accepted by the Civil Aviation Administration of China (“CAAC”) in January 2021, the Company has made significant breakthroughs in the certification process with the CAAC.
In February 2022, the CAAC formally adopted the Special Conditions for the EH216-S AAV Type Certification (the “Special Conditions”), which is believed to be the world’s first type certification of its kind for an electric unmanned aircraft system designed and used for low-altitude passenger-carrying urban air mobility (“UAM”) operations. The Special Conditions provide clear safety requirements for the certification of the EH216-S, including flight performance, aircraft structures, design and constructions, propulsion systems, systems and equipment, data link, ground control station, etc.
With specified requirements set out, the Company has progressed to the Compliance Review phase and have submitted to the CAAC the Project Specific Certification Plan (“PSCP”) and the Certification Plan (“CP”) with solid means of compliance.
Updates on 100 Air Mobility Routes Initiative
Under the CAAC’s guiding principles, EHang and its partners can carry out operational trial flights during the airworthiness certification process, subject to certain compliance requirements. As part of the 100 Air Mobility Routes Initiative, the EHang UAM operating team has supported over 4,000 operational trial flights with the EH216 AAVs in practical scenarios for aerial sightseeing operating routes at selected 9 operation spots in China as of March 2022.
Driven by the authorities’ strategic planning in sustainable air mobility and smart city management, EHang AAV solutions have started to become popular among local governments in China.
In December 2021, in partnership with Guangzhou Development District Communications Investment Group Co., Ltd., EHang launched the 5G Intelligent Air Mobility Experience Center as one of its UAM operation spots in the urban area of Guangzhou city, where its headquarters is located. This Experience Center is especially designed for EHang AAVs, equipped with infrastructures including a rooftop vertiport as well as a hangar for power charging and maintenance. Multiple operational flight routes have been planned and tested for urban passenger transportation, aerial sightseeing, aerial logistics and smart city management in Guangzhou.
In February 2022, Qintang District Urban Construction Investment Group Co., Ltd. unveiled its procurement plan4 for estimated 60 units of the EH216-S AAVs with a RMB138 million budget for its planned Intelligent Air Mobility and Urban Management Infrastructure Project in Guigang city, Guangxi province.
Other Business Highlights for the Fourth Quarter 2021 and Recent Developments
Partnership with Shenzhen Expressway to Co-Develop Smart City Transportation Network in China
In October 2021, EHang and Shenzhen Expressway, a company listed in both Shanghai and Hong Kong, announced the deployment and a live demonstration of Shenzhen’s first AAV command-and-control platform for expressway network management, emergency rescue and safety operations. Both parties will further explore the innovative integration of AAV air mobility and expressway networks for smart city transportation.
Cooperation with Spanish National Police for AAV Uses in Emergency and Security Missions in Spain
In October 2021, EHang partnered with the Spanish National Police to explore potential use cases for AAVs in emergency and security missions such as firefighting, accessing contaminated areas with nuclear, radiological, bacteriological or chemical risks, landing in confined areas, transporting supplies, and other police services that may require agile mobility.
Introduction of EH216 into Indonesia jointly with Prestige Aviation through Debut Flight Demonstration in Bali
In November 2021, EHang and its local Indonesian partner Prestige Aviation conducted a debut flight demonstration of the EH216 for aerial sightseeing in the world-famous tourism hotspot Bali, Indonesia, with a Special Certificate of Airworthiness issued by the Directorate General of Civil Aviation of the Republic of Indonesia.
First Order for VT-30 and AirX’s Pre-Order for 50 Units of EH216 Series in Japan
In December 2021, EHang secured the first order for its VT-30, a long-range electric two-seat passenger-grade AAV in Japan. EHang will work with local partners, such as the Okayama Kurashiki Mizushima Aero & Space Industry Cluster Study Group (“MASC”), to further explore use cases of the EH216 and the VT-30 for cross-island travel, emergency rescue and aerial logistics, and develop the UAM network in Japan.
After successive EH216 demonstration flights in Fukushima and Okayama in December 2021, EHang received the biggest pre-order in Japan for 50 units of the EH216 series in January 2022 from AirX Inc. (“AirX”), a leading Japanese air mobility digital platform company with more than 100 helicopter sightseeing operating routes and private helicopter charter services. The pre-order of the EH216 series AAVs is planned to facilitate various UAM projects in Japan and has a prospect of providing “air taxi” services for the 2025 World Expo in Osaka, Kansai, Japan.
AEROTREE’s Pre-Order for 50 Units of EH216 Series and 10 Units of VT-30 in Malaysia
In March 2022, EHang entered into a strategic partnership with Aerotree Flight Services Sdn. Bhd. (“AEROTREE”), a subsidiary of leading Malaysian aviation company AEROTREE Group, for developing UAM businesses, including Maintenance, Repair and Overhaul (“MRO”) and training in Malaysia. AEROTREE placed a pre-order for 50 units of the EH216 series, which include the EH216-S, EH216-L and EH216-F, as well as 10 units of the VT-30 AAVs. AEROTREE has also purchased one unit of the EH216-S AAV from EHang previously.
Appointment of Mr. Xin Fang as Chief Operating Officer
In February 2022, EHang appointed Mr. Xin Fang as the Chief Operating Officer. With more than 20 years of business administration and operational experience in the sales of IT products and system integration solutions, tourism operation and management, Mr. Fang is in charge of the Company’s daily operations, with a focus on sales of EHang AAV products and solutions and the commercialization of UAM services.
CEO Remarks
Mr. Huazhi Hu, EHang’s Founder, Chairman and Chief Executive Officer, commented, “2021 was a year full of challenges. Although faced with uncertainties and short-term impacts caused by many external factors such as the ongoing COVID-19 epidemic, capital market fluctuations, and volatilities in the global landscape, EHang, as a technological innovation enterprise, has the core competencies and the long-term potential to achieve our mission for providing safe, autonomous, intelligent and sustainable air transportation for humans and the society. Our commitment to bringing value to the UAM industry, our partners, community, and shareholders remains strong and increasingly solid.”
“In 2021, we were in a strategic transition period towards the Company’s strategic goal of becoming an urban air mobility platform operator. On one hand, our annual gross margin reached 63.4%; on the other hand, we are pleased to expand strategic partnerships and receive orders and pre-orders from well-known domestic and foreign customers and partners, especially in the Asian markets, including China, Korea, Japan, Indonesia and Malaysia. As of March 29, 2022, we have unfulfilled pre-orders5 for over 1,000 units of our passenger-grade AAV products, including the EH216 series and the VT-30, on a cumulative basis. The growing market demand has formed a solid foundation that strengthens our confidence for future revenue growth.”
“Meanwhile, in the past year, our team worked diligently on the airworthiness certification process for our EH216-S AAV, the establishment of the UAM operation system and the operational trial flights carried out in China, all of which are aimed to prepare ourselves for the future commercial service operations. So far, the EH216-S Type Certificate is progressively expected to be obtained around the middle of this year, and it’s reasonable for us to expect the launch of commercial service operations of our AAVs in selected locations in China in the second half of the year. In the near future, we will release the first group of Chinese cities that will launch our commercial operational services and flight routes after we obtain the certification.”
Financial Results for the Fourth Quarter 2021
Revenues
Total revenues were RMB8.7 million (US$1.4 million), compared with RMB13.0 million in the third quarter of 2021.
Costs of revenues
Costs of revenues were RMB3.5 million (US$0.6 million), compared with RMB5.0 million in the third quarter of 2021, primarily due to the change in the sales volume of AAV products and solutions.
Gross profit
Gross profit was RMB5.2 million (US$0.8 million), compared with RMB8.0 million in the third quarter of 2021.
Gross margin was 60.1%, compared with 61.8% in the third quarter of 2021. The decrease in gross margin was mainly due to changes in revenue mix.
Operating expenses
Total operating expenses were RMB112.7 million (US$17.7 million), compared with RMB86.3 million in the third quarter of 2021.
Sales and marketing expenses were RMB12.2 million (US$1.9 million), up 14.0% from RMB10.7 million in the third quarter of 2021. The increase was mainly due to the increased marketing and promotion activities for enhancing brand awareness. General and administrative expenses were RMB61.7 million (US$9.7 million), up 67.4% from RMB36.8 million in the third quarter of 2021. The increase was mainly due to additional provisions for accounts receivable in light of the impacts from the continuous COVID-19 epidemic and control measures in China. Research and development expenses were RMB38.8 million (US$6.1 million), on par with RMB38.7 million in the third quarter of 2021.
Adjusted operating expenses6(non-GAAP)
Adjusted operating expenses were RMB90.4 million (US$14.2 million), representing an increase of 46.2% from RMB61.8 million in the third quarter of 2021. Adjusted sales and marketing expenses, adjusted general and administration expenses and adjusted research and development expenses were RMB7.8 million (US$1.2 million), RMB51.5 million (US$8.1 million) and RMB31.1 million (US$4.9 million) in the fourth quarter of 2021, respectively. The increase in adjusted operating expenses was primarily due to the reasons discussed under the “Operating expenses” heading above.
Operating loss
Operating loss was RMB106.1 million (US$16.6 million), compared with RMB73.3 million in the third quarter of 2021.
Adjusted operating loss (non-GAAP)7
Adjusted operating loss was RMB83.8 million (US$13.1 million), compared with RMB48.9 million in the third quarter of 2021.
Net loss
Net loss was RMB104.5 million (US$16.4 million), compared with RMB72.3 million in the third quarter of 2021.
Adjusted net loss (non-GAAP)8
Adjusted net loss was RMB82.2 million (US$12.9 million), compared with RMB47.8 million in the third quarter of 2021.
Adjusted net loss attributable to EHang’s ordinary shareholders was RMB83.1 million (US$13.0 million), compared with RMB47.5 million in the third quarter of 2021.
Loss per share and per ADS
Basic and diluted net loss per ordinary share were both RMB0.93 (US$0.15). Adjusted basic and diluted net loss per ordinary share9 (non-GAAP) were both RMB0.73 (US$0.11).
Basic and diluted net loss per ADS were both RMB1.86 (US$0.30). Adjusted basic and diluted net loss per ADS10 (non-GAAP) were both RMB1.46 (US$0.22).
Balance Sheets
The cash, cash equivalents, restricted cash and short-term investments balances were RMB312.1 million (US$49.0million) as of December 31, 2021.
Financial Results for Fiscal Year 2021
Revenues
Total revenues were RMB56.8 million (US$8.9 million), compared with RMB180.1 million in 2020.
Costs of revenues
Costs of revenues were RMB20.8 million (US$3.3 million), compared with RMB73.9 million in 2020, primarily due to the change in the sales volume of AAV products and solutions.
Gross profit
Gross profit was RMB36.0 million (US$5.6 million), compared with RMB106.2 million in 2020. Gross margin was 63.4%, representing an increase of 4.4 percentage points from 59.0% in 2020. The increase was mainly due to a favorable revenue mix with a contribution from a command-and-control system delivered in 2021.
Adjusted gross profit
Adjusted gross profit was RMB36.0 million (US$5.6million), compared with RMB108.6 million in 2020. Adjusted gross margin was 63.4%, up 3.1 percentage points from 60.3% in 2020.
Operating expenses
Total operating expenses were RMB367.8 million (US$57.7 million), compared with RMB204.1 million in 2020.
Sales and marketing expenses were RMB43.2 million (US$6.8 million), up 16.3% from RMB37.2 million in 2020. The increase was primarily due to an increase in share-based compensation expenses. General and administration expenses were RMB187.4 million (US$29.4 million), up 204.1% from RMB61.6 million in 2020. The increase was mainly due to an increase in share-based compensation expenses, one-time additional expenses related to extension of annual report filing and the additional provisions for accounts receivable in light of the impacts from the continuous COVID-19 epidemic and control measures in China. Research and development expenses were RMB137.2 million (US$21.5 million), up 30.3% from RMB105.3 million in 2020. The increase was mainly due to continuously growing R&D expenditure for the development of AAV models, including the EH216 series, the VT-30 and new models, and their related operating systems with enhanced functionalities. R&D expenses were also impacted by an increase of the R&D team and related salary and benefit expenses that reflect the Company’s commitment to strengthening its product development and certification efforts in order to drive future sales growth and commercial operations.
Adjusted operating expenses (non-GAAP)
Adjusted operating expenses were RMB246.6 million (US$38.7 million), up 62.6% from RMB151.6 million in 2020.
Operating loss
Operating loss was RMB320.5 million (US$50.3 million), compared with RMB91.3 million in 2020.
Adjusted operating loss (non-GAAP)
Adjusted operating loss was RMB199.4 million (US$31.3 million), compared with RMB36.4 million in 2020.
Net loss
Net loss was RMB313.9 million (US$49.3 million), compared with RMB92.0 million in 2020.
Adjusted net loss (non-GAAP)
Adjusted net loss was RMB192.8 million (US$30.3 million), compared with RMB37.2 million in 2020.
Loss per share and per ADS
Basic and diluted net loss per ordinary share were both RMB2.78 (US$0.44). Adjusted basic and diluted net loss per ordinary share (non-GAAP) were both RMB1.71 (US$0.27).
Basic and diluted net loss per ADS were both RMB5.56 (US$0.88). Adjusted basic and diluted net loss per ADS (non-GAAP) were both RMB3.42 (US$0.54).
Business Outlook
The Company’s annual revenue forecast for 2022 is expected to be in the range between RMB190 million and RMB210 million, most of which is expected to be generated in the second half year on the condition that the Company obtains the airworthiness certification of EH216-S AAV and launches its commercial operational services.
The above outlook is based on information available as of the date of this press release and reflects the Company’s current and preliminary expectations regarding its business situation and market conditions. The outlook is subject to change, especially considering uncertainties and situations related to the COVID-19 epidemic and global landscape.
Conference Call
EHang’s management team will host an earnings conference call at 8:00 AM on Tuesday, March 29, 2022, U.S. Eastern Time (8:00 PM on March 29, 2022, Beijing/Hong Kong Time).
Please register in advance for the conference using the link provided below and dial in 10 minutes before the conference is scheduled to begin. Conference access information will be provided upon registration.
Participant Online Registration: http://apac.directeventreg.com/registration/event/5459938
A replay of the conference call may be accessed by phone at the following numbers until April 6, 2022. To access the replay, please reference the conference ID 5459938.
A live and archived webcast of the conference call will be available on the company’s investors relations website at http://ir.ehang.com/.
About EHang
EHang (Nasdaq: EH) is the world’s leading autonomous aerial vehicle (“AAV”) technology platform company. EHang’s mission is to make safe, autonomous, and eco-friendly air mobility accessible to everyone. EHang provides customers in various industries with AAV products and commercial solutions: urban air mobility (including passenger transportation and logistics), smart city management, and aerial media solutions. As the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility (“UAM”) industry, EHang continues to explore the boundaries of the sky to make flying technologies benefit our life in smart cities. For more information, please visit .
Safe Harbor Statement
This press release contains statements that may constitute “forward-looking” statements pursuant to the “safe harbor” provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,” “anticipates,” “aims,” “future,” “intends,” “plans,” “believes,” “estimates,” “likely to” and similar statements. Management has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While they believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond management’s control. These statements involve risks and uncertainties that may cause EHang’s actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.
Non-GAAP Financial Measures
The Company uses adjusted gross profit, adjusted operating expenses, adjusted sales and marketing expenses, adjusted general and administration expenses, adjusted research and development expenses, adjusted operating loss, adjusted net loss, adjusted net loss attributable to ordinary shareholders, adjusted basic and diluted loss per ordinary share and adjusted basic and diluted loss per ADS (collectively, the “Non-GAAP Financial Measures”) in evaluating its operating results and for financial and operational decision-making purposes. There was no income tax impact on the Company’s non-GAAP adjustments because the non-GAAP adjustments are usually recorded in entities located in tax-free jurisdictions, such as the Cayman Islands.
The Company believes that the Non-GAAP Financial Measures help identify underlying trends in its business that could otherwise be distorted by the effects of items such as share-based compensation expenses that are included in their comparable GAAP measures. The Company believes that the Non-GAAP Financial Measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management members in their financial and operational decision-making.
The Non-GAAP Financial Measures are not defined under U.S. GAAP and are not presented in accordance with U.S. GAAP. The Non-GAAP Financial Measures have limitations as analytical tools. One of the key limitations of using the Non-GAAP Financial Measures is that they do not reflect all items of expense that affect the Company’s operations. Share-based compensation expenses have been and may continue to be incurred in the business and are not reflected in the presentation of the Non-GAAP Financial Measures. Further, the Non-GAAP Financial Measures may differ from the non-GAAP information used by other companies, including peer companies, and therefore their comparability may be limited. The Company compensates for these limitations by reconciling the Non-GAAP Financial Measures to the nearest U.S. GAAP measures, all of which should be considered when evaluating the Company’s performance.
Each of the Non-GAAP Financial Measures should not be considered in isolation or construed as an alternative to its comparable GAAP measure or any other measure of performance or as an indicator of the Company’s operating performance. Investors are encouraged to review the Company’s most directly comparable GAAP measures in conjunction with the Non-GAAP Financial Measures. The Non-GAAP Financial Measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Company’s data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.
For more information on the Non-GAAP Financial Measures, please see the table captioned “Unaudited Reconciliations of GAAP and Non-GAAP Results” set forth at the end of this press release.
Exchange Rate
This press release contains translations of certain RMB amounts into U.S. dollars (“USD”) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.3726 to US$1.00, the noon buying rate in effect on December 30, 2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to in this press release could have been converted into USD or RMB, as the case may be, at any particular rate or at all.
Investor Contact: [email protected]
Media Contact: [email protected]
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1 Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release. 2 Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release. 3 The EH216-S refers to the standard model for passenger transportation in the EH216 series, compared to the EH216-F model for aerial firefighting and the EH216-L model for aerial logistics. 4 The public disclosure of the procurement plan on the Guangxi Public Resources Trading Platform of China: http://ggzy.jgswj.gxzf.gov.cn/gxggzy/projectDetails.html?infoid=4e4f14cc-fa3b-4955-b9d1-ed3a4e539956&categorynum=001002005001 5 Pre-orders do not obligate the customers to purchase EHang’s AAVs unless certain conditions are satisfied. Fulfilment is expected to take several years and is conditional upon, among other things, achievement of performance milestones and receipt of regulatory approvals. 6 Adjusted operating expenses is a non-GAAP financial measure, which is defined as operating expenses excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release. 7 Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release. 8 Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release. 9 Adjusted basic and diluted loss per ordinary share is a non-GAAP financial measure, which is defined as basic and diluted loss per ordinary share excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release. 10 Adjusted basic and diluted loss per ADS is a non-GAAP financial measure, which is defined as basic and diluted loss per ADS excluding share-based compensation expenses. See “Non-GAAP Financial Measures” at the end of this press release.
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