Q2 Financial Report: EHang reports 152.5 percent revenue increase QoQ
Overall more positive news for EHang shareholders after a torrid share decline during the last 18 months. The headlines for the company’s Q2 (ended June 30th) financial report are:
: Total Revenues Up 152.5 percent QoQ
: High Quarterly Gross Margin of 67.1 percent
: Indicative Facilities of RMB1 Billion by Agricultural Bank of China Guangzhou Branch
: Increasing Deliveries in China and Orders/Pre-Orders in Asia
: Strategic Partnership with C.P. Group in Thailand
EHang 216 Flying over Sea in East China
Breakdown of Financial and Operational Highlights
: Total revenues were RMB14.6 million (USD2.2 million), representing an increase of 152.5 percent from RMB5.8 million in the first quarter of 2022.
: Gross margin was 67.1 percent, maintaining a high level with a further increase of 4.6 percentage points from 62.5 percent in the first quarter of 2022.
: Operating loss was RMB74.3 million (USD11.1 million), compared with RMB63.8 million in the first quarter of 2022.
: Adjusted operating loss (non-GAAP) was RMB51.2 million (USD7.6 million), compared with RMB41.7 million in the first quarter of 2022.
: Net loss was RMB73.9 million (USD11.0 million), compared with RMB68.8 million in the first quarter of 2022.
: Adjusted net loss (non-GAAP) was RMB50.8 million (USD7.6 million), compared with RMB40.9 million in the first quarter of 2022. Cash equivalents, restricted cash and short-term investments balances were RMB240.7 million (USD35.9 million) as of June 30, 2022.
: Sales and deliveries of EHang 216 AAVs were 8 units, representing an increase of 166.7 percent from 3 units in the first quarter of 2022.
: Under the 100 Air Mobility Routes Initiative, more than 5,700 operational trial flights of EHang 216 have been conducted in practical scenarios at 11 operation spots in China to date.
Business Highlights for Q2 and Recent Updates
: The EH216‑S Type Certification (TC) process has progressed into new phases following the CAAC issued EHang with the first Special Conditions for TC of a human-carrying unmanned aircraft system specially for EH216‑S in February 2022. The CAAC TC expert team and EHang have reached a consensus on the Project Specific Certification Plan, Certification Basis, and the Certification Plan, respectively.
: EHang certification team has made further innovative explorations on new topics related to unmanned aircraft system, such as unmanned system, data link and ground control system and worked out 13 means of compliance applicable to EH216.
Tianxingjian
: Partnership with Tianxingjian on Scenic Flight Project with Its Purchased EHang 216 AAVs at Aizhai Wonder Tourist Area in Jishou, Hunan, China. In June, EHang received an initial purchase order for 5 units of EHang 216 AAVs from Tianxingjian Cultural Tourism Investment and Development LLC., an affiliated enterprise of the Jishou city government in China’s Hunan province, with deliveries for all 5 units completed.
The two parties plan to develop a scenic flight project at the Aizhai Wonder Tourist Area in Jishou and have initiated trial flight operations at this newly-developed spot since the second quarter. Tianxingjian plans to purchase an additional 25 units of EHang 216 as the project progresses.
: Strategic Partnership with Agricultural Bank of China Guangzhou Branch with Indicative Credit Facilities of RMB1 Billion for Long-Term Cooperation.
: Prestige Aviation’s Pre-Order for 100 Units of EHang 216 in Indonesia.
Arriving in Indonesia
In April, EHang received a pre-order for 100 units of EHang 216 from Prestige Aviation, an Indonesian aviation company and a subsidiary of Prestige Corp. Prestige Aviation previously purchased one unit of EHang 216 from the Company with successful flight demonstrations conducted in Bali and Jakarta, Indonesia.
: Strategic Partnership with C.P. Group to Introduce AAVs into Thailand. In May 2022, EHang formed a strategic partnership with Charoen Pokphand Group Co., Ltd. (“C.P. Group”), one of the largest conglomerates in Thailand, with an intent to establish a joint venture in Thailand for AAV sales and Urban Air Mobility (“UAM”) operations.
Huazhi Hu, Founder and CEO of EHang commented, “During the past quarter, we achieved excellent results from our efforts in actively adapting to the macro environment and gradually recovering from the continuous impact of the COVID-19 resurgence in China.”
He continued, “Our unique and leading AAV products and solutions drove the increases in orders, pre-orders, deliveries and customers especially in domestic and Southeast Asia markets.”
Hu added, “More importantly, we are grateful for both the CAAC and our certification team’s efforts, professionalism, innovation spirit, and great support, that made our today’s certification progress and breakthrough possible, bringing us closer to the goal of the EH216‑S type certification and a new era of urban air mobility.”
Huazhi Hu
Financial Results for the Second Quarter 2022
Revenues
Total revenues were RMB14.6 million (USD2.2 million), up 152.5 percent from RMB5.8 million in the first quarter of 2022, primarily due to the increase in the sales volume of AAV products.
Costs of revenues
Costs of revenues were RMB4.8 million (USD0.7 million), up 121.0 percent from RMB2.2 million in the first quarter of 2022, primarily due to the increase in the sales volume of AAV products.
Gross profit
Gross profit was RMB9.8 million (USD1.5 million), up 171.4 percent from RMB3.6 million in the first quarter of 2022. Gross margin was 67.1 percent, up 4.6 percentage points from 62.5 percent in the first quarter of 2022. The increase in gross margin was mainly attributed to changes in revenue mix.
Operating expenses
Total operating expenses were RMB86.5 million (USD12.9 million), compared with RMB68.2 million in the first quarter of 2022.
General and administrative expenses: were RMB39.6 million (USD5.9 million), compared with RMB23.5 million in the first quarter of 2022. The increase was mainly attributed to professional service fees mainly related to annual report filing and some other legal matters as well as 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: RMB34.7 million (USD5.2 million), compared with RMB32.0 million in the first quarter of 2022. The increase was mainly attributed to the continuous development of new AAV models and the ongoing EHang 216 certification.
Adjusted operating expenses (non-GAAP)
Adjusted operating expenses were RMB63.4 million (USD9.5 million), compared with RMB46.1 million in the first quarter of 2022. Adjusted sales and marketing expenses, adjusted general and administration expenses, and adjusted research and development expenses were RMB7.7 million (USD1.2 million), RMB28.8 million (USD4.3 million) and RMB26.9 million (USD4.0 million) in the second quarter of 2022, respectively. The increase in adjusted operating expenses was primarily due to the same reasons discussed under the heading “Operating expenses” above.
Tackling Fires
Operating loss
Operating loss was RMB74.3 million (USD11.1 million), compared with RMB63.8 million in the first quarter of 2022.
Adjusted operating loss (non-GAAP)
Adjusted operating loss was RMB51.2 million (USD7.6 million), compared with RMB41.7 million in the first quarter of 2022.
Net loss
Net loss was RMB73.9 million (USD11.0 million), compared with RMB68.8 million in the first quarter of 2022.
Adjusted net loss (non-GAAP)
Adjusted net loss was RMB50.8 million (USD7.6 million), compared with RMB40.9 million in the first quarter of 2022.
Adjusted net loss attributable to EHang’s ordinary shareholders was RMB50.4 million (USD7.5 million), compared with RMB40.7 million in the first quarter of 2022.
Loss per share and per ADS
Basic and diluted net loss per ordinary share were both RMB0.64 (USD0.10). Adjusted basic and diluted net loss per ordinary share6 (non-GAAP) were both RMB0.44 (US$0.07).
Basic and diluted net loss per ADS were both RMB1.28 (USD0.20). Adjusted basic and diluted net loss per ADS7 (non-GAAP) were both RMB0.88 (USD0.14).
Balance Sheets
The cash, cash equivalents, restricted cash and short-term investments balances were RMB240.7 million (USD35.9 million) as of June 30, 2022.
EHang Business Outlook
The company says, “We expect signs of business recovery in the second half year as we are actively adapting to the macro environment, continuing to move forward on EHang 216 certification, securing more product orders, and expanding our regional aerial media business in the Europe market. We remain confident in our growth potentials and long-term outlook given our core values and unique advantages.
“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 changes, especially uncertainties and situations related to the certification process, COVID-19 epidemic and control measures, and global political and economic landscape.”
Conference Call
EHang’s management team will host an earnings conference call at 8:00 AM on Thursday, August 18th U.S. Eastern Time (8:00 PM on August 18, 2022, Beijing/Hong Kong Time).
To join the conference call via telephone, participants must use the following link to complete an online registration process. Upon registering, each participant will receive email instructions to access the conference call, including dial-in information and a PIN number allowing access to the conference call.
Participant Online Registration
https://register.vevent.com/register/BI95f54720a7714c048f45140812e61135
A live and archived webcast of the conference call will be available on the Company’s investors relations website at:
(An analysis of the Q2 Financial Report is to follow)
(Images: EHang)
