EHang Holdings Limited (EH) 15 Mar 242023 Q4 Earnings call transcript

Good day, ladies and gentlemen. Thank you for standing by and welcome to the EHang Fourth Quarter and Fiscal Year of 2023 Earnings Conference Call.

As a reminder, we are recording today's call.Now I will turn the conference over to Anne Ji, EHang's Senior Director of Investor Relations. Ms. Anne, please proceed.

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

note give Mr. team today, of translations. remarks. Chief Founder, convenience In Financial contain forward-looking followed today's prepared made and Hu, only. Director Chairman will A Act Mr. and management's in will On the Private be discussion pursuant for discrepancy, the Huazhi statements and prevail. harbor Yang, Reform safe Litigation call to Chief Board. All U.S. statement of please in Conor Q&A the management The the successfully session purpose we have XXXX. afterwards.Before delivered will are our Executive provisions that of Officer; regional Securities follow of language case is Remarks translation will Officer Chinese the will English the any continue, by we

inherent involve uncertainties. statements risks and Forward-looking

filings go year Hu. quarter me fiscal included that be the Huazhi update company's any call such, any other presented may let Please ahead, in are the as different to is from and except and expressed are XXXX otherwise.With numbers the please As to all with CEO, under over applicable the law. and fourth note Mr. Mr. company turn results today. The Also, required RMB does and unless Further Hu. now for our not that, of uncertainties this actual expectations stated the public information the company's SEC. obligation regarding risks materially in assume forward-looking statements

for product the you passenger-carrying aspects. our Type Hu's results quarter obtained EHang translation innovative remarks. various fourth independently December a for across of remarkable system first last milestone Certificate, a conference obtained the which In English is for of production In In This call. our and of aircraft from first qualification aircraft Thank year, TC, EHXXX-S October is This a us pilotless out eVTOL we Certificate, developed CAAC. eVTOL applications XXXX, eVTOL achieved world's Passenger-Carrying world's rolled on TC by standard pilotless aircraft. line [Interpreted] have this passenger-carrying year, our joining and the AC. signifying first EHXXX certified everyone. our Hello, marks Airworthiness the Mr. last commercial

steadily a of RMB pilotless demand is result, The improve. sales Series to a this delighted EHXXX-S the As number we of and quarter of doubling a of passenger-carrying commenced TC operations a EHXXX-S represents demand in total are revenue deliveries in aircraft.Following delivered. years. the product see XX X rate we and the the single quarter-over-quarter. in XX a fourth for generated marking continue units resulting for certified to past strong we quarter surpassed quarter our as eVTOL in the with market in the operating over fourth highest EHXXX fourth in cash surge year-over-year delivery Xx AC, nearly positive the growth and flow Moreover, growth our significant of million the Notably, product company's quarter the substantial volume of

onsite strategic as a work economy.Since the China, sessions high growth Series report first-mover chaired emerging the support This Airworthiness EHXXX was quality the in a Work we fourth preorders by aircraft international underscores XXX,XXX confidence are pricing The and has are central collaborations, emerging a from institution other and China market been believe market. our our these in estimate, that expected Furthermore, sector municipal strong with for eVTOL to CAAC to to enthusiasm new both the Wuxi great surpassed we the productive during for Production will completed. nearly aligns to economy Jiangsu have for obtain review are the witnessed market from and with engine the play Chinese first government in and overseas economy. and strategy at quality Certification province advancing We of future the for recently demand passenger-carrying to low-altitude the Guangzhou, domestic pilotless held like low-altitude the compared the to give domestic customers overseas Currently, to units XXXX are set The Certificate, of stage in the the XXX of the have recently the low-altitude for Hefei, mass the growth which their EHXXX low-altitude production, competitive efforts benefiting PC vehicles City the incorporated the be Chinese quality is pilotless is December of conducted the nurturing XXXX.This Our time. the our a future Xi In contributes Furthermore, competitive demonstration in process.The prospects.We economy research RMB serve work strong quarter, development least According highly resulting in policies assurance the XXX provinces market Economic high million proactive when submitted PC, our a for for emerging been actively prices attributed a market and the team area. have at quality forward. the production pricing newly low-altitude low-altitude to the in President from for when growth the a and UAE economy all obtained that of planning Conference was have our other actively expectation and support government markets. passenger-carrying Central In poised the received system and market development Government Wuhan a and us in included industry, by system required USD and XX represents forces. year size role obtaining near almost of we into the applications have announced pricing China's worldwide. X for demand EHXXX-S to final the and and EHXXX-S. under this inspections RMB airway fostering system recognition create in industry favorable X.XX Through Moreover, RMB billion supervision X in vital new the economy regions. and we in documents produced offering industry the China's reach preorders to partnership of products demand economy formed the governments last these of expected a and local globally also market for elevated robust low-altitude the the and to reports. leading all in XXXX CAAC China propelling Chinese have low-altitude the economy the preparation CAAC. substantial trillion next surge advantage of EHXXX from for policies, product. Capitalizing is in the customers in hundreds the market

strategic to the multiple to benchmarks and pioneering in with eVTOL eVTOL coordinate regulations second system EHang establish actively center operator planning EHXXX-S are forms the Hefei set for the continues operations. municipal to in the to government with Guangzhou expertise collaborations low-altitude and target such flight such [Technical low-altitude million the These the and to the ceremonies operations the first the demonstrations developed economy at USD low-altitude announced major in air cooperation industry. will the low-altitude UAM in officially of for conducting a preparations Bay, standards stimulate XXXX, year. as Guangzhou cases allow step Central pilotless the safety of we fourth launch for a urban with and EHang amount and commercial operations things the the operation in training commercial to and economy, of will agreement and deleveraging construction eVTOL development cities operation EHang economy that support strengthen into has regulatory In XXX including quarter, reliable governments eVTOL quarter we Park economy.Currently, of Shenzhen our Huangpu the reached Park government systems, the exemplify public and efforts tourism our our will as series Difficulty] taxis.This distinctive crucial complete CAAC sites key from we movies Lake science extend use vertiports the operation in world's in with benchmark policies the commercial XX of OH this Jiulong by completed to while operations the Hefei. aero commercial of District infrastructure During municipal The Luogang several first various supportive eyes. potential a demonstration shape the the fiction the in

well-established to to pilotless will Inx, research of opportunities have in striving infrastructure product and February cetera. batteries full industry a and economy expand its in and chain lithium unlock a advantage thermal liquid of state this significant our energy GAC's we provider with potential year for actively of enhance the et jointly various solid which this the based and and vehicles.Regarding strengthen of Group, system standing vehicles. manufacturing company strategic Lithium suppliers over battery terms performance charging expansion Automobile industrial accelerate leading solid battery into discharging In smart short, batteries continue for and Guangzhou intelligent Gotion, applications.To chain, production, range, with entered battery within the market end, develop Shenzhen, offers we in aerial a with storage performance, on designed cruising cooperating the new we density, application invested In EHXXX-S state cells, to will energy strategically to solid safety, global sector. been and chain partners partnership terms low-altitude eVTOLs. in our stability, especially solutions, In experience the we packs, year, pilotless last January, we lithium charging our aerial for extensive partnered in metal to capitalize to supply development, batteries the GAC

across near designed greatly flights Based we all flat Furthermore, more conduct requirements. extend range Myself And test just will we VT-XX, VT-XX. result, has improvements meets a preparations is of Meanwhile, passenger-carrying tour rigorous transportation.We will will amazing. analyze the this another other and intercity our person flight the the for we feels are VT-XX to our to unable As COO, also Mr. the will call days term. iterate full application pilotless experienced devote performance on like a of I'd year many is to a few Japan this in and a we who Japan. events Fang, believe system indicators and my of and efforts and for actively commenced thanks cruise a of VT-XX it currently transition in you. future. doing at eVTOL the certification CFO, result, flight turn I performance product in towards on the and attend to earnings cities in R&D ensure EHXXX-S PC call.Next several our long-range desired leased This that with aircraft our testing older Conor. and be passenger-carrying our we for Thank Xin enhanced the thus over a will finally ago, model. to that testing another

Thank This is you, Hello, Hu. Mr. everyone. Conor.

stated are Having of go available for analysis our the are I I XXXX in some is proprietary that which our note contained the are of please million on and last website. unless a of TC million period reached XX.X the obtained QX, details, total in in to IR units earnings Detailed remarkable primarily our and in for revenues delivered here. increase quarter-over-quarter. Series RMB XX.X% million fiscal year same all quarter the and QX. year up increase AC significant in in Before EHXXX-S, increase fourth of The CNY RMB our upon press XX% XX.X presented sales now We numbers XXX.X% of XX.X and will XXX% key the into of points release, highlight volume EHXXX, year-over-year and products. EHXXX increase was CNY attributed from our a from XX otherwise.

the in a total EHXXX XXXX.The of in was margin excluding revenue in XXX% in CNY revenue XX.X% in X.X margin in advantage to mover of flat XXXX. CNY XXXX, in were XX.X% in was XX.X units, QX. from the CNY stable Gross compensation sales significant first CNY represents adjusted efforts expenses, the last million despite of from QX. by XXXX. operating XXX.X year in the slight annual XXX% basis, global from XXXX XX.X% margin were For from XXX.X CNY up enhancing million high XX CNY and mix. remained UAM the million, in XX XX.X the XX.X expenses, our level strength in deliveries channels at and are The and as of in share-based XXXX fiscal in gross Gross CNY high increase QX expenses units competitive million, period expansion of from In from primarily down decrease XX QX, level XX.X% was adjusted a intensified our primarily year XXXX operating up which digital AAV in operating a series XX.X% X.X% percentage same million industries. and an This point quarter-over-quarter million due a brand XXXX, of were down expenses XXX.X increase result marketing changes driven XX.X% from awareness.On continued million

and million million RMB in QX. same year CNY was XX.X As adjusted XX.X% a improvement million in a from result, XX.X% the our QX improvement last in CNY a period from XX.X loss operating XX.X

fiscal the improvement XXXX. XXX.X XX.X% was in was the net CNY improvement loss million CNY from CNY year XX.X XX.X period improvement in same from loss million and operating a in XX.X XXX.X CNY a QX QX. year, in million XX.X% from a last XX.X% For million, adjusted Adjusted CNY million,

net sheet. adjusted flow to positive from in liquidity was XXXX.Thanks highlight that approach I year, XXX.X million fiscal XXX.X in achieved QX strengthening cash balance improvement management, XXXX, million further and our we to stringent in XX.X% operations cash the to CNY loss For like from would our a CNY

deposits, QX, cash, short-term equivalents, and we million deposit of CNY cash As XXX.X short-term restricted short-term of the investment balances. of end had

We fulfill future. needs position for are several to current profitability near of the credit cash with to facilities in flow regarding in although our cash expansion us actively discussion banks from operations also expected our the be commercial reach and cash sufficient will

XX towards year-over-year.That concludes revenue and in for year with achieving our QX mass of prepared million we XXX% remarks. increase anticipate Looking our production CNY safety obtaining ahead, progress representing TC an this deliveries, about of

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

question First Instructions] from [Operator TF. comes the [indiscernible] of line from

the order So like about size. my first question really is

scale So into before? seen with has interest the in orders deliveries that to customer you large actually compared more TC, becoming increase after possible obtaining have converted an

question. for Thank your you

low-altitude an from units increasing municipal the of stage ] the grows our [ rapidly, As seen the purchase economy and In and similar quarter with order purchase come. from of industry with year, for have more we at tourism first demand related government operators. we government received intentional both orders Wuxi EHXXX-S delivery XXX to the the

poised the year With the in supportive demonstrate policies and growing advantage demand, our mover stable our market this contribute EH EHXXX to global is to first growth.

So also Shaanxi, that and Zhuhai, from similar Hainan orders come. like Guangzhou, to Wuxi, demand other many Wuhan, other see than we Henan,

question landscape. second my the So competition is about

you on your insight elaborate [Technical you could provide the company's further in Also customers how could and landscape? So you Difficulty]?

year obtained TC we last of October obtained we AC. first have that last year the the have and end first

peers the eVTOL still are PC. this the the and testing China and So also prototype in other application in industry kind for and undergoing companies first is its this many of overseas and

to So that to X be advantage. X.X for the can eVTOL we company will products, basically our the in we And years, several eVTOL. other have next product commercialize compare only

Firstly, usage so around a meters lightweight we and have compact very X in very measuring design. length

within deploy making that aircraft and the X-seater adaptive have on means also very secondly, our our easy the a And we the lower urban so is infrastructure product pilot. to XXX highly So demand without city.

errors system, related be technology the training, also by a a command for and issues can management utilizing fleet can cost to this potential our pilot pilots.And use autonomous route pilot So achieved. and control will that definitely predetermined and eliminate in human safety need

net with operate future. is very to our a XXX,XXX also USD price in the of So domestic that price will competitive international selling scale price also in selling And a and in comparison. RMB very, million of enable X.XX

as be far know million. at global will peers USD million other As X we XX our to USD that selling between

only our sustain business we think will view, of to so can point profitable customer's other our time. be enable a from that So that customer

short with are we that intracity these think very range. like systems are So very, And for those advantage we all competitive.

we year. line application VT-XX we a have has distance, to mentioned long that the for For send Mr. that product plan TC earlier also this of Hu sometime

question now from the Citi. take from Zu of next [ ] will the line We Robin

me? hear you Can

All We hear. Yes. can clear.

[Technical before, we Difficulty] China. tend in trading mentioned come So things as to

I X here first the questions. have my know That's So like about I would to [Technical Difficulty]. question.

Thank Okay. question. your you for

to [Foreign CEO. of First all, I like the our Chinese into for question would translate Language]

economy central committee of the after top this that top has as to authority through government a the indicated strategic focus year very has meeting on various government That last the level there on [indiscernible]. low-altitude And year. of central that China that end industries currently of China that meeting. going the Through for one this is that the the of the the [Interpreted] are

has there year. as passenger-carried tourism, are provinces integrated as of for than urban low-altitude will provincial for more of to be the of that local city's So pilotless only the economy currently, for Through formally aircraft focus government central XX that also the government and applied part transportation their the transportation focus this but system. not adopted

So will the not also long in air future, scenario the that come very true. that's taxi

the trillion expect the economy XXX and that reached market estimate billion by China XXXX RMB to low-altitude a we it high XXXX. we size grow to in has in RMB X Now of total

a Our plan operate year. taxis and sometime this real the to scenario air make it

their taxis size CEO, will market of dimension that from X can the Hu. a air dimension this people total This and transformation the eVTOL. to our vehicle by Mr. regular transportation So change from as from soon is X enhance greatly

I about have question another so expense. And our

and precisely. managed operation sales company costs as more fact grows, in company's will the So the be

future the details sharing for just So mind our would expense regarding company? you in the more

Yes.

and of also marketing, expenses, research and development. operating which and our to is G&A Regarding sales composed

so our up can see that quarter XX you a RMB XXXX growth with of revenue rate XXX%. ramp fourth revenue example, we for million have reached we As of year-on-year

this, adjusted was was revenue as and last operating XXX% XXX% that grows compared such quarter operating expenses adjusted So our to as ago of when expenses year year the X of total at fourth revenue revenue.

you can our So in rapid revenue. the that's see rapid to OpEx due drop of increase

at believe next high revenue in So growth years. on several growth a grow continue will we the rate to our that very

total to in that revenue hope we operating currently that So our time. XX% adjusted about expenses of time can drop drop X XXX% in years' we years' from manage of X revenue

And company starts much for development very the help China's thank your to your economy future. all you the Thank for of in you answer. low-altitude in

So that's and my of weekend. nice have all you all questions and thank you a

will We next of now from take Song coming the from Ting question line Sachs. Goldman the

the announced with operation Shenzhen launch has center of EHang So demonstration in December. UAM government

question expect of year revenues sales shipment my UAM the revenues So from any from see to is besides we EHXXX-S? do operation this

mentioned many company year. earlier, Hu the operations Mr. We [Technical plans to are see Difficulty]. companies that As the off kick there this commercial

We still operation being. stage, not year. expect service the our to time come in Series this [Technical be will area, In it may the from majority the our for significant Difficulty] sales of revenue but EHXXX initial of current

air to future of receiving we received Looking orders more grow we lot operation. recurring from forward venture kept will form services requests -- areas, as have overseas. operational kept expand and can the to also as so our And a from revenues customers for joint not we domestic we revenues a gradually receiving such the

forward, total our year and increase from going will out operation expect revenue. that of coming the the percentage next we revenue So gradually

question is overseas about revenues. another So

European So the government a in in and with also some company company overseas partner I has Dubai a with see countries. partnership

market year any do progress this expect overseas or So year? next in we

we have a we market. overseas also TC, strong received obtained After from very Yes. demand

Logistics, also first announced formed have started intend of purchase UAE and the from received batch to customers, we this to we quarter XXX actually they we a Wings that year. strategic first that orders and the we units have deliver As relationship in

And our drone Spain. also shows As Colombia, product Arabia of places performed our and we in in Japan fourth quarter like live sold and last many year, also Saudi to Qatar. we XXX

we of year, coming quarter fourth And our revenues. market the derived that last out of market. total revenue from So this XX% be overseas a overseas year revenue fairly also amount our expect will good was from in

take now Yu of will line question next We Securities. from from the the Chen Haitong

one, the updation second we like as and progress production following years X overseas that And our Okay. think And obtain overseas is the the as to first know to first. one I X capacity. to year AC like need VT-XX. the overseas one the questions. would if because following to is previous regarding of about the the capacity know step vertical regarding the we we first We enter the market, detailed new the have this well AC would EHXXX in the

X that's So questions.

Yes.

seen in and as mentioned Regarding countries. strong markets overseas especially earlier, South we to I demand have Middle overseas from Africa East, TC, the ASEAN

rely places, our we will local the And obtain so partner TC. local for those on to

of is already obtained validation from when intentional overseas authorities TC, in commit specific orders to simplified Certificate up X local with for market the they operations be substantial acquire be expected sites.As of government receiving expansion we call overseas order their customer we're to and process increase, production, for TC typically, and the and TC the to XX of So will approach operations entry a of demand purchase preorders having this to apply then to initial procedure. with XXX And so currently the units CAAC a and trial we according in our terms and through to number the enable and units products. and customers' or aviation Type countries. example us at the this streamlined requirements. preorders, expand of which these And Consequently, validation an fulfilled additional orders will expedite a

an attractive for us surrounding altitude has So the environment favorable policy economy low the growth. provided

increase we substantial throughout volume delivery XXXX. anticipate a consequently, in So

we But is Typically, strong gave Chinese during at million, slightly first there's quarter. CNY Year. the increased further long New has First an quarter forward market units market exploring annual seen XXX a because Yunfu grows. the our demand that XX have are year. look to quarter our the establish guidance eVTOL we quarter-over-quarter far production Currently, so very vacation support as this orders and and other facilities for of demand expands capacity production capacity facility our to as opportunities of we we in for

Instructions] will the from take line of Bank now from Li We U.S. the [Operator Deutsche Laura question next

a on Congratulations robust quarter.

is about question first your product. my the new VT-XX, So

and You testing application now. the mentioned you're preparing for the

specs about any the now? EHXXX can there now? do you client talk more expect the are And you bring be to product base of new the So will or will like us applications similar kind

translate will CEO, I who take will your to our your [Foreign question. Okay. question Language]

within [Interpreted] is Yes. certification very TC Actually VT-XX. we we air the application release flight configuration release year. all submit are the later doing video for done demand. put know the EHXXX the during has VT-XX the R&D the will within we're work and years this certification and And VT-XX testing we we we for flight. flights the in with CEO's into will will And think have lot CEO the efforts the about and videos testing taken experience. more most for flight. a internal year, our a practical VT-XX personally few stable as flight. traffic and the VT-XX the some for of now in and we we will VT-XX testing the more We the our flight the will model. traffic Actually this do VT-XX of a the And have the design past That's why area completed is And the type doing internal air we traffic for for urban volume,

a will That's all main and almost for and soon the are EHXXX and for for application the covers models or have air we our scenario most these VT-XX. flight release data X updates the accumulated why we VT-XX a the products. Yes, So lot progress mobility. almost more EHXXX the urban

And cooperation my does Will we second details share it work? what you more can collectively question about of is GAC kind as the support like give each other? to or recently R&D reached you how manufacture this you or provide you Group. like mentioned, Okay. like about with agreements Could

Language] [Foreign

China and plan strong in a economy. low-altitude was policy There about [Interpreted] variable the

this under us. governments of are lot working So background, a with

the enterprises it's with GAC pleasure So our work some state-owned to as such Group.

The the product. that the their maybe flying people's other on hand, mainly first is will our mind collaboration pop we GAC up develop Group And about into thing the also actually taxis help to about production.

within production a we site Now have are going we line Guangzhou selected Group our autonomous and with with enter GAC. to production cooperation GAC establish

improve and flight. So continue product of our through eVTOL ensure the to eVTOL product quality of our to the collaboration, our we safety will

Thank you.

time the Given to me limited, closing let the turn is remarks. for Ms. call back Anne

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

any information events through If participating on to you. firm website. or further our investor by the following contact next our please call. IR you have our email and forward we provided calendar interest questions, our look your earnings And Thank appreciate

participating. today's you for concludes This call. conference Thank

may call.] by You marked transcript live of on the disconnect.[Portions now this are that [Interpreted] were spoken an interpreter present