EHang(EH)2024-11-18 16:07Financial Data and Key Metrics - Q3 2024 total revenues reached RMB128 1 million, a 347 8% year-over-year increase and a 25 6% quarter-over-quarter increase, driven by higher sales volume of EH216 series products [40] - Q3 gross margin was 61 2%, slightly down from 64 6% in Q3 2023 and 62 4% in Q2 2024, reflecting a competitive advantage in the eVTOL sector [41] - Adjusted operating income for Q3 was RMB9 million, a significant improvement from an adjusted operating loss of RMB34 2 million in Q3 2023 and RMB4 7 million in Q2 2024 [43] - Adjusted net income for Q3 was RMB15 7 million, marking a second consecutive quarter of profitability, compared to an adjusted net loss of RMB31 3 million in Q3 2023 and RMB1 2 million in Q2 2024 [43] - Positive operating cash flow was maintained for the fourth consecutive quarter, with a cash balance of RMB1,077 6 million at the end of Q3 [44] Business Line Data and Key Metrics - 63 units of EH216-S were delivered in Q3, a record high compared to 13 units in Q3 2023 and 49 units in Q2 2024 [40] - Domestic order book exceeded 1,000 units, with repeat orders from existing customers and new orders from clients in Fujian, Chongqing, Tianjin, Guizhou, and Shaanxi [25] - Strategic partnerships were formed with Enpower for electric motor development and Inx for high-energy solid-state battery technology, achieving a 90% improvement in flight endurance to 48 minutes [17][53] Market Data and Key Metrics - Demo flights were conducted in Brazil, Japan, and Thailand, extending the company's footprint to 18 countries globally [20] - EH216-S received an experimental flight authorization certificate from Brazil's National Civil Aviation Agency, with plans for more in-depth test flights to facilitate local airworthiness certification [20] - The Civil Aviation Authority of Thailand plans to open flight tests for certified eVTOLs, with commercial flight operations in Phuket and Samui targeted for 2025 [20] Company Strategy and Industry Competition - The company is focusing on enhancing EH216-S performance and commercializing a long-range product, VT-35, to complement the existing product portfolio [19] - Expansion of production capacity through joint ventures and contract manufacturing in Anhui, Shanxi, Guangxi, and Beijing is planned, with technical upgrades to the Yunfu factory starting in Q4 [31][61] - The company aims to achieve certification and mass production of solid-state batteries for EH216-S by the end of 2025 [54] Management Commentary on Operating Environment and Future Outlook - The company expects Q4 2024 revenue to reach RMB135 million, a 138 5% year-over-year increase, with full-year 2024 revenue expected to reach RMB427 million, a 263 5% year-over-year increase [47] - Ongoing improvements in low-altitude policies and increased government support for the low-altitude economy are expected to drive market demand for pilotless eVTOL aircraft [46] - The company is focusing on fine-tuning its commercialization model to enhance customer operations and achieve safe and stable operations as quickly as possible [46] Other Important Information - The company announced a 100 million [44] - The financing will be used to advance next-generation digital technology and products, scale production capacity, expand the team, establish new headquarters and operating sites, and support general corporate activities [45] Q&A Session Summary Question: Solid-state battery development with Inx - The joint development with Inx began early, focusing on increasing battery capacity density, cycle life, maintainability, and safety features, with mass production expected by the end of 2025 [51][54] - The solid-state battery has increased the EH216-S's flight endurance to 48 minutes, with a goal of reaching 60 minutes by next year [53] Question: Progress of Operator Certificate (OC) application - The OC review is progressing well, with most work completed and necessary adjustments submitted to the Civil Aviation Administration of China, with the first OC expected to be issued by the end of 2024 [55][57] Question: Production capacity and CapEx - CapEx for 2024 is 20 million planned for 2025, including technical upgrades to the Yunfu factory and construction of new factories in Guangzhou, Hefei, and Guangxi [60][61] - The impact of technical upgrades on production and delivery is expected to be minimal, with potential short-term disruptions offset by increased production capacity later on [63] Question: Breakeven point and supply chain strategy - As production scales up, battery and key component prices are expected to decrease, with gross margins maintained around 60% [70][79] - The company is focusing on enhancing core components like motors and batteries through collaborative development, strategic investments, and joint ventures [71] Question: VTC certification progress in overseas markets - The company is advancing overseas certification through bilateral airworthiness channels with the Civil Aviation Administration of China and exploring pilot programs in Brazil and Thailand [81][82] Question: Future operational plans in Hefei - The Hefei Hub is being developed to OC standards, with plans to build over 30 eVTOL takeoff and landing points in Hefei over the next three years [84] Question: Capacity ramp-up and order delivery - Production capacity is being enhanced through supply chain optimization and technical upgrades, with new factories planned to meet increasing demand [89][90] Question: CapEx investment in solid-state battery and collaboration - R&D investment in solid-state batteries is recorded as R&D costs, with intellectual property for core technologies and components jointly owned by EHang and its partners [96]