EHang Holdings Limited (EH) 17 Aug 232023 Q2 Earnings call transcript

Good day ladies and gentlemen, and thank you for standing by. Welcome to EHang's Second Quarter 2023 Earnings Conference Call.

As a reminder, we are recording today's call.

I will now turn the call over to Anne Ji, EHang's Senior Director and Investor Relations. Ms. begin. may you Anne,

the you replay the us the company's The company's being available of Thank the website. Please call call IR be conference second today's posted to XXXX. is on is release discuss financial An earnings IR for everyone. website. on note audio joining recorded. conference quarter company's will Hello, results the for on

language Chief Officer; successfully Operating management Hu, call and our Remarks for Mr. prevail. Founder, will session Mr. followed afterwards. convenience today, delivered by A any Xin Chief and be In follow team is remarks. the Liu, only. Fang, On Richard Huazhi original translation of Executive Officer; case The All statement Mr. will in Chief purpose give management's will we Chairman Officer. discrepancy, Q&A English have Chinese the translations. Financial prepared the will in

today's pursuant Private Harbor contain please continue, will forward-looking discussion we Reform Litigation Securities of made statements provisions of Act note Before XXXX. Safe the the that to U.S.

Forward-looking inherent risks involve uncertainties. and statements

from As different may forward-looking in risks to statements, uncertainties company's The under law. SEC. included company's required results with applicable expressed any company regarding filings expectations and the be public actual any and is Further materially not does other assume the the these update today. such, information its obligation except as

numbers XXXX, that are RMB for in all note presented otherwise. stated unless of Also, second please quarter and are the

With Mr. ahead, Hu. Mr. me that, turn go Please CEO, Huazhi Hu. let now our over call the to

English translation [interrupted] of the Mr. [Foreign Language] remarks. Below is Hu's

about also and Type Aerial I'm thrilled joining our news the Certification for by of flights phase that the also last with and demonstration before call planned Type the trial to CAAC. the certification obtaining with have Test Vehicle and This team. you completed the we of system the Today, of unwavering Flight exciting Unmanned Thank successfully all test completed last efforts today. definitive milestone everyone. Certificate the compliance all Hello, EHXXX-S share EHang an our the test you result and of is verification in conference

the XX have when Since XXXX, over short successfully link this CAAC the TC journey, months. spanned our material, officially substantive application various January environment, control stations. Throughout effort completed electronics, [indiscernible] EHXXX-S challenges and data has strength, tasks, we time from in the overcome all ranging wear, to ground finally battery, the accepted

have a continuous safety EHang, [indiscernible] Through We the proved significant airworthiness marks CAAC. indicated standards approaches, sufficiently requirements not optimization. the Vehicle. ongoing for Aerial scientific This piloted unprecedented knowledge, ours only achievement an and meet Unmanned testing eVTOL rigorous that projects TC by also for Furthermore, EHXXX-S and demonstrations, eVTOL advancement program is airworthiness first a for in unlike industry. an aircraft, other to TC entire but world's certification our the the of

to I would like exceptional is would very Also, officials to the CAAC their procedures well their and soon. the review unwavering for and that will for many collaborations so like It I to express the technological company's my their airworthiness and and the team as gratitude spirits. expertise professionalism, efforts certification perseverance as process. remaining supporters believe finished the today. our throughout impressive our to led thank us I achievement be have investors patience team,

next way Type our for the the stage. Before it pave of operations official the authorization will the commercial Certificate, in

I after AV and financial believe an delivered have QX. products before deliveries product managed consideration manner will advices, external around In controlled the were revenues margin were Certificate. in we Five unit our quarter, of we taking of RMBXX EHXXX-S in the performance excellent upcoming a Type internal stayed Total second million, the into certification. gross XX%.

secured period, During in strategic through July. $XX million we investment over around certification the

the first this in strategic investment million enhanced year. liquidity. $XX has further This the Following quarter Qingdao our New of Area from Coast West

cetera. Finally, experience Chairman our several as including Committee Tongcheng companies, and on CFO media, Company's he the et that governance. Conor announce listed will September serves such And Investor has and corporate companies Board Audit capital opportunity served director of at several Conor I'm management, XX cetera. director company, our of years financial to than at X. also the a glad as Dangdang, position of of of Tuniu, He Yang, take effective et CFO well-known [indiscernible] markets take the Relations, as to Travel, more this extensive over in the

has years I the our three believe a the and welcome in will level. into profound take warmly new as Conor We During served confidence he to definitely of he he company. understanding Board, join team. our Director a EHang management

from resignation which his his the tendered would will has expertise his to company, Liu contributions us. the his tremendous personal CFO August, the development during Board the to to but eight tenure our Richard continued a year position of at thank team, will of he management I like as and end with to due be On Richard his contributing effective success. behalf Senior to serve Adviser of the for EHan's Directors reasons,

Mather, of Mr. a EHang and and including at I to a executive Lau look new experience He over CFO Conor years management also has companies, of In Director XX auditing XX Perfect addition, to Compensation stage. & served Ogilvy has and forward RoboSense, the various Audit Mr. financial years listed with working and the companies into Kee the Lau PWC. new accounting Chairman we Lau of as et take Committee. industry-leading World, cetera. experience together Committee finance and of and the Independent Mr. in a to have and also expertise as as Wing the also Board has member of welcomed and

to our Operating Next, Chief you. hand Xin Mr. the call will Thank over I Fang. Officer,

English [interrupted] Language] translation Mr. [Foreign of Below Fang's is remarks. the

and Hu, you, hello, everyone. Thank Mr.

on opportunities During domestic as make stages Certification, new the both cooperation been the second international the to EHXXX-S continue and Type fronts. also quarter, we in exploring final of progress we and have actively business

this operations. solid a of March initial signing poster agreement year. a in corporation the of establish the with enterprise After to listed leading framework Shenzhen tourism, as a So China groundwork Xiyu certification upcoming for in tourism

quarter. forward Our move second in collaboration the

AAVs established a have joint minimum five low-altitude projects in this and a of Tianshan, of delivered batch within minutes five Lake sightseeing The Xiyu EHang and Heavenly to areas to next attraction, with tourism tourism national XXX the of tourist to the and of scenic customers China, We a years. XA-class develop with venture venture. EHXXX-S plan AAVs first units Northwestern in AAV's joint other operate and plans of

committed is Shenzhen's low-altitude development first into operation memorandum the we positioned landmarks. as District, partnership the Shenzhen the with services. to Against [indiscernible] the gateway of collaboration jointly demonstration one backdrop, OH has Moreover, to economy a Area certificate in dedicated of city. develop Bay, a This July, government a obtaining UEM itself for at operation Bay understanding propelling hub. for this its China's ever which low-altitude innovative center, economy tourism aviation of inked shaping tourism We to a initiate and Bao’an aerial launch is Wings the demonstration names pivotal strategic of national Bao’an’s EHXXX-S establishing the after first of plan the experience and route, commercial sightseeing

cooperation certification our a in company Bay crucial a plans. Area, post will As step operational the Shenzhen serve with our Greater in Bao’an as

of pleased of management measures China for officially state to June the that of flight Vehicle. We issued are this in see interim Unmanned Aerial year, council the

for in this lay will industry, administrative will economy commercial expanding regulation a market robust good The also of first operations the the opportunities market. low-altitude gradually special of growth our This after kind while obtaining the the certificate. the foundation of EHXXX-S China. prepare the of It UAV

end approaching project derived Initiative results. a have line, across XXX fruitful years sites and cities operation total Certification trial July of also this by Type Mobility Air As partners, the China Along our the of have XX also EHXXX two the in year. XX is customers final within our operations achieved we with trial Route the

than trial and been for after our operations will sites, the flights way EHXXX-S the conducted aerial by certification. More for secured pave commercial these operational sightseeing which have low-altitude at X,XXX tourism

conducting accumulated existing order, UMA of more which engagement and have will the was Japan's In proactive Public a inducted Mobility. April than customers and EHang this while of member Advanced Following a industry Committee obtaining maintained Private the and a the Europe, year, test pipelines as proper demonstration certificate cultivating of potential flights. market, in deliver XXX and Air other partners, In we within Asia EHXXX-S, domestic global we AAV units. to in the for

successfully our EHXXX XX extending have completed flights Japan's successfully our test we world. many completed AAVs June, Israel flights Okinawa, as to the Series In eVTOL Belgium in first Recently, in countries test flight of the Hawking] EHXXX-S footprint as [Alan making around and [indiscernible]. the (ph) sites

customers regulators, safe, and eco-friendly efficient unique and scale and more experience. will create grow, that more of We innovations drive products, steadily the and know our to number for technologies autonomous, changes flight are operations mobility appreciate an numbers passengers a enjoy It more air confident increasing the and society. industrial people about as and AAV EHan's value enabling and will our

over the to Richard. CFO, Thanks. I our call turn will Next,

Thank you, Xing. everyone. Hello,

on please note All Before press Detailed changes numbers all are stated which in quarter a presented website. go earnings are in release, otherwise and our RMB otherwise. that available unless are for specified. is basis analysis second I into details, IR percentage on contained XXXX, of are quarter-over-quarter unless our the

Shenzhen In extended in per $XX.X the China, million venture total been TC here. revenues the EHXXX-S of listed QX with process in primarily EHXXX-S request. the some that delivery approaching be joint leading highlight five from now post with operator were tourism light deliveries a In $XX of will TC I units is points compared tourism. the as some to have the end, of the million customer's QX, to Xiyu of key

in players electric QX, a the a of electric gross in types from higher fluctuation, XX.X% vehicles, decrease Gross high minor is attributed the notably of QX. X.X level, industries. This margin largely than points to margin Despite stayed XX.X% this our eVTOL continued car advantages those percentage to in be our UAM other of at slight as companies. such and unique global transportation

etcetera. QX, QX. compared compensation and operating the process, expenditures to marketing aging The change expenses brand accounts $XX.X related was activities In Increased conforming aircraft Certification verification of million long EHXXX-S are and tests excluding some receivable, adjusted for enhance were million, of $XX.X phase operating our to the increased awareness, in with provisions additional Type mainly compliant and share-based expenses, which demonstration our because final expenses the

was $XX.X compared with our million $XX.X QX. QX As a loss adjusted operating million loss with in in in QX. Adjusted result, was compared net $XX.X million, $XX.X million

a we our approach kept cash Furthermore, liquidity sheet management. balance to have prudent with optimizing and

strategic restricted liquidity our for enhance of our a help will with as cash strengthened have liquidity As a we million and funding short-term placement the the further million from some brings deposits. in next private QX, support In long-term our investment equivalents and The of cash, plans the provide $XXX.X execution had $XX end via $XXX.X of of July, of we equity post-certification million reserve This our investors. cash commercial end July. vital our phase of of to growth.

conference Huazhi the past earnings And I company's my great the last mentioned my an will last, EHang sincerely call years. as is be Conor serve ideal your and earlier, to like a drive greater and and Adviser new force technology I company to honor into has the the the from communities as an the It continue time to all thank the the part as listed EHang for Senior past industry-leading Thank eight you. Board wish in CFO to innovative the eight joining success. stage. years. a is in to take continued a company today of company as been would trust to startup to investment support successor believe CFO. I an

That prepared concludes remarks. our

for now the questions. open ahead. please Let's go call Operator,

Instructions] Our first Goldman you. from comes Jeng Verena Thank [Operator Sachs. with question

you now can line question. line Verena, your is Your open, is your open. ask

ahead. go ask line open, can your your question Verena, can you is You

Hi.

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we Yes, you. can. Thank

line the first Okay. the is testing. the finish for of Thank you. My have TC, about all question time we because

of expect can take for how the cycle. we just full TC will gain factory? production after wondering the you. Thank our soon long that how And the it we production So

Richard. question. your for this you Thank is Verena, Hi,

in to its And timing, be So very continuing to closely first issued finish TC to at Once basically, is the been an in soon, our expected accordingly. CAAC team is eVTOL kind working with this the industry. issued, and we the TC expected have remaining be will the make the procedures, team are the completed which time. of that announcement will terms of TC be

So stay please tuned.

Series EHXXX annual TC, units an In initial that of you we capacity respect in of City with production Shenzhen post production have as products. know XXX of a facility

basically, So the we in capacities TC to after post support obtained future. the will be utilized those deliveries TC, the

TC follow-up apart question also you Richard. from I outlook, about the also market second the half could have you, share demand. the here for end Thank another part,

recovery the recovery, for the tourism Thank still are we example, market ongoing half? For you. seeing for second the

Okay.

in So on existing cooperation China. demand in to the expected further basically, units for XXX give this lead has with increase. announced units pipeline our our examples, pipeline our accumulated order is than some potential previous to cooperation we tourism will continue order press release about demand side, five to And more in to the future years. and a To this XXX Xiyu you

gradually. Additionally, operations, only for important Bao’an a but very not our post generate order expected City help demands the is strategic district also to with partnership Shenzhen commercial TC of step our potential

and concerned, market, ongoing revenue driver in tourism As growth. market a increasing recovery sure, far our as for demands very are continuing it key is tourism the the for the is

our is such sightseeing in in et compared of TC, issuing include vehicle flight line more preferential experience, obtain And needs applications, have aerial about in operation to what the this means and policies which to we will a promote and and called aerial with to cetera, economy unmanned the beginning helicopter’s. customer be the as Further, are development more since products more cities commercial are soon. UAM the altitude the Additionally, mainly which been innovative and scenario traditional low eVTOL. year, China of

to very of new favorable So environment accelerate has this also this created development industry. the a policy

economy become example, -- Shenzhen pilot unmanned CAAC City the and the approved aviation Shenzhen is an planning such Shenzhen promote been as regulation City City To low-altitude by you has industries [indiscernible] policies further a give issue zone this to expected of to to of to support are expected development development high-quality strong the to economy to industry. is economy development first Shenzhen the measures regulation sectors This low-altitude to of year. and China's support support low-altitude the provide the

bolster once have our a abundant we to practical expected collaboration our as are the our and operations more Shenzhen. growth cities the projects initiatives and Greater the revenue which make Further, and in Area, based both Basically, in with we experience area, commence company viable. local in resources will Bay

It’s Richard. clear. Thank very you. you, Thank

question next you. Thank One moment our for please.

question the come from of from Tianfeng Next Securities. will (ph) Wu] line [Wei

Your line now open. is

you Can voice? my Hi. hear

Yes, we can hear you. Thank you.

have Thank two you. I questions.

an potential that there aircraft question or enforcement is, some Thank certain aircraft recently future? China shed you we the process? export noticed for team so facing scenario more one much. has The first could that published [indiscernible] the implication near TC our Will any be is, management unmanned implemented And light stating be application are prohibition. on second can the in

take Richard again. question. is I This will your

[indiscernible] and the China of always EHang do I loss all, So following adhering your we our for where activities. complying policy company, or to first regulations of principle has question, export because [indiscernible] relevant to requirements basically been strictly the as like first we business internationally already business other no with It smoothly. an on the of in countries China products. TC [indiscernible] would significant in have basically, we control In UAV-related going have process, say, the legality impact [indiscernible] the respect for and has listed been in related compliance and our been recent new and licensing

mean control spokesperson [indiscernible]. the of addition, stated the has not that Commerce [indiscernible] Ministry does of In

compliance innovative the leveraging as normally. So procedures, are we follow can is products that to long our been UAV are technologies relevant it people our conducted products measures products to and had around uses as legal strict only for in in be exporting for are world. taking customer users. And civil sure company civilian order The exported and and management and legitimate the dedicated activities make restrictions understood used prudent the the the serve to company

to EHXXX-S our as respect after its will first focusing market. your the second our In tourism so-called on be question, you know, TC gets priority low-altitude

The of as and initial areas, scenarios experiencing, as operations scenic et cetera. possible aerial ones, the We partners flight tourism announced our area, will operators Tianshan with sightseeing, scenic Bay Heaven which we Shenzhen team OH scenic continue many area China areas, for as such Lake in up and [indiscernible] like of [indiscernible] to Location-wise, previously. in

will to Series you. aerial logistics, such emergency as leverage continue Thank use to cetera. deliveries, EHXXX medical product cases, explore our Furthermore, platform et we aerial other response, firefighting,

Richard. you, Thank

are you. Thank at in There no more the questions queue this time.

Let to me Ms. remarks. turn call back Anne closing the for

Thank you, operator, and participating for thank you on call. today's all

following interest and our contact next participating earnings through you. calendar If Thank who we are further firm. the your to in appreciate you IR events questions, information our call. website. look on our have provided please our forward investor And E-mail

conference Thank today's you call. concludes all again. This

You Everyone, have may wonderful day. a now disconnect.