China-Based Company Advertises Fire Drone, K-Pop Mogul, and 93% Profit | The daily business of investors

By | September 14, 2023

China-based aircraft and drone manufacturing company EHang Holding (EH) has gone unnoticed in the race to launch customized urban air taxis and firefighting drones. EHang positions itself as the world’s leading autonomous aerial vehicle (AAV) technology platform company and has achieved some important regulatory milestones this year. Meanwhile, EH stock is up nearly 93% in 2023.


EHang produces autonomous electric vertical take-off and landing (eVTOL) aircraft for urban environments. The company’s EH216-S is an autopiloted two-passenger eVTOL that looks similar to a large drone. The plane has a range of 22 miles, a flight time of 21 minutes and a cruising speed of 62 miles per hour.

The 216F firefighting eVTOL is a first aid drone, equipped with cameras, laser-guided window breakers, foam throwers and fire extinguishing bombs. The plane’s maximum altitude of nearly 2,000 feet allows it to fight fires in all but the tallest of China’s skyscrapers.

EHang also produces the EH116, which is the one-passenger version of the EH216. The company’s Unmanned Aircraft Cloud System (UACS) is an airspace management, flight plan and logistics system for executing commercial operations.

The drone manufacturer prepares for takeoff

EHang has completed all planned test flights for the EH216-S and is in the final phase of demonstrations and compliance verification, the company reported during its second quarter results on Aug. 17. EHang said it expects to obtain type certification from the Civil Aviation Administration of China (CAAC) “soon” in the release.

On August 21, the CAAC approved the start of test operations of EHang’s UACS. EHang noted that receiving type certification is an important step towards large-scale commercial operations.

Over the past two years, EHang has successfully conducted more than 9,300 low-altitude flight tests in 20 locations in China, including 18 major cities. The company will start operations in Shenzhen’s Bao’an District Government once type certification is completed. In mid-July EHang signed a memorandum of understanding with the municipality on a comprehensive strategic partnership.

In July, EHang secured $23 million in funding from a private placement round led by South Korean music mogul Lee Soo-Man, founder of one of the world’s largest K-Pop labels, SM Entertainment. The total number of shares sold in the private placement was not disclosed. EHang said it plans to use the proceeds for working capital, general corporate purposes and technology acceleration, business development and post-certification operations.

Additionally, Soo-Man will collaborate with EHang to drive urban air mobility business development in the Asia-Pacific regions.

EHang Finance, Urban Aerial Outlook

EHang has yet to turn a profit. Its sales have ranged between $1.2 million and $3.2 million over the past four quarters. During that period the company averaged a 60% increase in revenue, skewed by a 255% increase in the first quarter. According to the most recent report, sales fell 37% to $1.4 million.

However, EHang believes it is well positioned to capture a major part of the growing urban air mobility market. The market is optimistically estimated to reach $1 trillion by 2040 and grow to $9 trillion by 2050.

Custom Market Insights estimated the market at a slightly less rosy $8.2 billion for 2022, expected to grow at a 35% compound annual growth rate through 3032.

EHang expects China to account for nearly 30% of the global market, according to its August investor presentation.

Elsewhere, based in California Archer Aviation (ACHR) received approval to begin test flights for its eVTOL in August. ARK Investing (ARKK) has been buying shares as it advances into the U.S. UAM market.

The drone manufacturer operates as ADR

EHang trades American Depositary Receipts (ADRs) under the ticker EH on the Nasdaq. Shares have rallied nearly 93% this year as the company moves its products to market.

EH stock skyrocketed to 23.24 on Aug. 10 before slipping below its 10-day moving average. Stocks have been trending lower in recent weeks after failed attempts to recover their technical lines earlier in the month.

EHang rose 3.4% on Thursday.

You can follow Harrison Miller for more stock news and updates on X/Twitter @IBD_Harrison


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