EHang Holdings Ltd (EH) 2023 Q2 法說會逐字稿

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. Anne, you may begin.

女士們先生們，美好的一天，感謝你們的支持。歡迎參加億航智能 2023 年第二季度收益電話會議。謹此提醒您，我們正在對今天的通話進行錄音。我現在將電話轉給億航智能投資者關係高級總監 Anne Ji。安妮女士，您可以開始了。

Hello, everyone. Thank you for joining us on today's conference call to discuss the company's financial results for the second quarter of 2023. The earnings release is available on the company's IR website. Please note the conference call is being recorded and audio replay will be posted on the company's IR website. On the call today, we have Mr. Huazhi Hu, our Founder, Chairman and Chief Executive Officer; Mr. Xin Fang, Chief Operating Officer; and Mr. Richard Liu, Chief Financial Officer. The management team will successfully give prepared remarks. Remarks delivered in Chinese will followed by English translation. All translation is for the convenience purpose only. In case of any discrepancy, the management statement in a regional language will prevail. A Q&A session will follow afterwards.

大家好。感謝您參加今天的電話會議，討論公司 2023 年第二季度的財務業績。收益發布可在公司的 IR 網站上查看。請注意，電話會議正在錄音，音頻重播將發佈在公司的 IR 網站上。今天的電話會議有我們的創始人、董事長兼首席執行官胡華志先生；方鑫先生，首席運營官；劉先生，首席財務官。管理團隊將成功發表準備好的講話。中文發言將附有英文翻譯。所有翻譯僅是為了方便起見。如有任何差異，以地區語言的管理層聲明為準。隨後將進行問答環節。

Before we continue, please note that today's discussion will contain forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law.

在我們繼續之前，請注意，今天的討論將包含根據 1995 年美國私人證券訴訟改革法案的安全港條款做出的前瞻性陳述。前瞻性陳述涉及固有風險和不確定性。因此，公司的實際結果可能與今天表達的預期存在重大差異。有關此風險及其他風險和不確定性的更多信息包含在該公司向 SEC 提交的公開文件中。除適用法律要求外，公司不承擔更新任何前瞻性陳述的義務。

Also, please note that all numbers presented are in RMB and are for the second quarter of 2023, unless stated otherwise.

另請注意，除非另有說明，否則所有數字均以人民幣為單位，且為 2023 年第二季度的數據。

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

現在，讓我將電話轉給我們的首席執行官胡華志先生。胡先生，請繼續。

[Interpreted] Below is the English translation of Mr. Hu's remarks.

[解讀]以下是胡錦濤主席講話的英文譯文。

Hello, everyone. Thank you all for joining our conference call today. Today, I'm thrilled to share an exciting news with you about our type certification of EH216-S Unmanned Aerial Vehicle System that we have successfully completed all the planned test and trial flights in the last phase of demonstration and verification with compliance. And also completed the definitive test certification flight test by the CAAC. This is the last milestone before obtaining the type certificate and also the result of the unwavering efforts of EHang team.

大家好。感謝大家今天參加我們的電話會議。今天，我很高興與大家分享一個激動人心的消息，關於我們的EH216-S無人機系統型式認證，我們已成功完成最後階段演示和驗證中的所有計劃測試和試飛，並符合要求。並還完成了中國民航總局最終的試驗合格審定飛行試驗。這是獲得型式合格證前的最後一個里程碑，也是億航團隊不懈努力的結果。

Since the time when the CAAC officially accepted the EH216-S TC application in January 2021, our (inaudible) effort has spanned over 30 months. Throughout this journey, we have overcome various challenges and finally successfully completed all the substantive tasks ranging from battery, environment, material strength, electronics, software, data link to ground control stations. We have sufficiently proved that EH216-S meets the safety standards and airworthiness requirements by the CAAC. Through scientific approaches, (inaudible) demonstrations, rigorous testing and continuous optimization. This marks a significant achievement not only for EHang, but also indicated an unprecedented advancement in airworthiness certification for the entire eVTOL industry. Furthermore, unlike other ongoing TC projects of a piloted eVTOL aircraft to our knowledge, ours is the world's first TC program for an Unmanned Aerial Vehicle.

自2021年1月中國民航局正式受理EH216-S TC申請以來，我們（聽不清）的努力已經跨越了30多個月。在此過程中，我們克服了各種挑戰，最終成功完成了從電池、環境、材料強度、電子、軟件、數據鏈到地面控制站的所有實質性任務。我們已經充分證明EH216-S滿足中國民航局的安全標準和適航要求。通過科學方法、（聽不清）演示、嚴格測試和持續優化。這不僅是億航智能的一項重大成就，也標誌著整個電動垂直起降行業的適航認證取得了前所未有的進步。此外，據我們所知，與其他正在進行的有人駕駛 eVTOL 飛機的 TC 項目不同，我們的項目是世界上第一個無人機的 TC 項目。

I would like to express my gratitude to the CAAC's officials and the review team as well as the company's airworthiness certification team for their unwavering efforts and persevering spirits. It is their professionalism, exceptional technological expertise and collaborations that have led us to our impressive achievement today. Also, I would like to thank our investors and so many supporters for their patience throughout the process. I believe the remaining procedures will be finished very soon. Before the official authorization of the Type Certificate, it will pave the way for our commercial operations in the next stage. In the second quarter, taking into consideration of internal and external advices, we managed our product deliveries in a controlled manner before the upcoming Type Certificate.

向民航局領導和評審組以及公司適航審定組的不懈努力和堅持不懈的精神表示感謝。正是他們的專業精神、卓越的技術專長和合作使我們取得了今天令人印象深刻的成就。此外，我還要感謝我們的投資者和眾多支持者在整個過程中的耐心等待。相信剩下的手續很快就會辦完。在型式證書正式授權之前，將為我們下一階段的商業運營做好鋪墊。第二季度，考慮到內部和外部的建議，我們在即將獲得型式認證之前以受控的方式管理我們的產品交付。

5-unit of EH216-S AAV products were delivered in Q2. Total revenues were RMB 10 million, gross margin stayed around 60%. I believe we will have an excellent financial performance after the certification. During the certification period, we secured around over USD 23 million strategic investment in July. Following the USD 10 million strategic investment from Qingdao West Coast new area in the first quarter of this year. This has further enhanced our liquidity.

第二季度交付了5台EH216-S AAV產品。總收入1000萬元，毛利率保持在60%左右。我相信獲得認證後我們將擁有出色的財務業績。在認證期間，我們在7月份獲得了約超過2300萬美元的戰略投資。繼今年一季度青島西海岸新區戰略投資1000萬美元後。這進一步增強了我們的流動性。

Finally, I'm glad to take this opportunity to announce that Conor Yang, a Director of our company's Board and Chairman of the Audit Committee will take over the position of CFO of the company, effective on September 1. He served as the CFO at several listed companies, including AirMedia, Dangdang, Tuniu, et cetera. And he also serves as a director at several well-known companies such as iQiyi, (inaudible) et cetera. Conor has more than 30 years of extensive experience in financial management, investor relations, capital markets and corporate governance. During the 3 years, he served as a Director of our Board, he has profound understanding and confidence in the company. We warmly welcome Conor to join our management team. I believe he will definitely take EHang into a new level.

最後，我很高興藉此機會宣布，公司董事兼審計委員會主席楊康將接任公司首席財務官一職，自 9 月 1 日起生效。航美傳媒、噹噹網、途牛等多家上市公司。他還擔任愛奇藝、（聽不清）等多家知名公司的董事。 Conor 在財務管理、投資者關係、資本市場和公司治理方面擁有超過 30 年的豐富經驗。在擔任公司董事的3年時間裡，他對公司有著深刻的認識和信心。我們熱烈歡迎康納加入我們的管理團隊。我相信他一定會把億航智能帶入一個新的高度。

Richard Liu has tendered his resignation from the CFO position due to his personal reasons, which will be effective at the end of August, but he will serve as a senior adviser to the company, contributing his expertise to our continued success. On behalf of the Board of Directors and the management team, I would like to thank Richard for his tremendous contributions to EHang's development during his 8-year tenure with us.

劉強東因個人原因辭去首席財務官職務，將於8月底生效，但他將擔任公司高級顧問，為我們的持續成功貢獻自己的專業知識。我謹代表董事會和管理團隊，感謝理查德在億航任職的8年時間里為億航智能發展做出的巨大貢獻。

In addition, we have also welcomed Mr. Wing Kee Lau as a new Independent Director to the Board and also as the Chairman of the Audit Committee and a member of the Compensation Committee. Mr. Lau has over 30 years of experience and expertise in financial management and accounting and has served as the CFO and finance executives of various listed companies and industry-leading companies, including RoboSense, Perfect World, Ogilvy & Mather, et cetera. He also has 10 years of auditing experience at PwC. I look forward to working together with Conor and Mr. Lau to take EHang into a new stage.

此外，我們還歡迎劉永基先生擔任董事會新任獨立董事、審計委員會主席和薪酬委員會成員。劉先生在財務管理和會計方面擁有超過30年的經驗和專業知識，曾擔任多家上市公司和行業領先公司的CFO和財務主管，包括RoboSense、完美世界、奧美等。他還在普華永道擁有 10 年審計經驗。我期待與Conor和劉先生共同努力，將億航智能帶入新的階段。

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

接下來我將把電話轉交給我們的首席運營官方鑫先生。謝謝。

[Interpreted] Below is the English translation of Mr. Fang's remarks. Thank you, Mr. Hu, and hello, everyone.

[解讀]以下是方先生講話的英文譯文。謝謝胡總，大家好。

During the second quarter, as we continue to make progress in the final stages of EH216-S type certification, we have also been actively exploring the new business opportunities and cooperation on both domestic and international fronts, so as to establish a solid groundwork for the upcoming post-certification operations. After the initial signing of a corporation framework agreement with Xiyu Tourism, a Shenzhen listed leading tourism enterprise in China in March of this year. Our collaboration move forward in the second quarter. We have established a joint venture with Xiyu Tourism and delivered the first batch of 5-unit of EH216-S AAV's to this joint venture. The customers plan to develop low-altitude tourism and sightseeing projects with EHang AAVs in Heavenly Lake of Tianshan, a national 5A-class tourist attraction and other scenic areas in Northwestern China, and plans to operate a minimum of 120 units of AAVs within the next 5 years.

二季度，我們在EH216-S型式認證最後階段不斷取得進展的同時，也積極探索國內外新的商機與合作，為後續的EH216-S型式認證工作打下堅實的基礎。即將進行的認證後操作。今年3月與中國旅遊龍頭企業深圳上市企業西域旅遊初步簽署企業框架協議。我們的合作將在第二季度取得進展。我們與西域旅遊成立了合資公司，並向該合資公司交付了首批5架EH216-S AAV。客戶計劃利用億航自動駕駛飛行器在國家5A級旅遊景區天山天池等西北地區開發低空旅遊觀光項目，併計劃未來運營至少120台自動駕駛飛行器5年。

Moreover, Shenzhen positioned as a pivotal gateway for propelling China's innovative low-altitude economy has committed to shaping itself into a national low-altitude economy development demonstration city. Against this backdrop in July, we inked a memorandum of understanding for a strategic partnership with the government of Bao'an District, which is Shenzhen's aviation hub. This collaboration is dedicated to jointly establishing the first UAM operation demonstration center, names the wings of the Bay Area at OH Bay one of the Bao'an [culture] and tourism landmarks. We plan to develop the first eVTOL commercial route, initiate the operation of EH216-S after obtaining its certificate and launch aerial tourism sightseeing experience services.

此外，深圳定位為推動中國創新低空經濟的重要門戶，致力於將其打造成為國家低空經濟發展示範城市。在此背景下，我們於7月與深圳航空樞紐寶安區政府簽署了戰略合作諒解備忘錄。此次合作致力於共同打造首個城市空中交通運營示範中心，將OH灣灣區之翼打造為寶安文化旅遊地標之一。我們計劃開發首條eVTOL商業航線，並在EH216-S取得合格證後啟動運營，並推出空中旅遊觀光體驗服務。

As a company in the Greater Bay Area, our cooperation with Shenzhen Bao'an will serve as a crucial step in our post-certification operational plans. We are pleased to see that in June of this year, the state (inaudible) of China officially issued the interim measures for [flight] management of Unmanned Aerial Vehicles. The first special administrative regulation of this kind in China. This will gradually prepare the robust growth of the UAV industry, while expanding the market opportunities of the low-altitude economy market. It will also lay a good foundation for the commercial operations of our EH216-S after obtaining the certificate. As the EH216 type certification project is approaching the final line, our 100 Air Mobility Route Initiative trial operations also have achieved full flow results along with our customers and partners. We have also derived a total of 20 trial operation sites across 18 cities in China within the 2 years by the end of July this year.

作為大灣區的企業，我們與深圳寶安的合作將成為我們獲證後運營計劃的關鍵一步。我們高興地看到，今年6月，中國國家（聽不清）正式發布了《無人機管理暫行辦法》。我國尚屬首例此類特別行政法規。這將逐步為無人機行業的強勁增長做好準備，同時擴大低空經濟市場的市場機會。也將為我們EH216-S獲得證書後的商業運營打下良好的基礎。隨著EH216型式認證項目的臨近，我們的百航航線試運行也與客戶、合作夥伴一起取得了全流成果。截至今年7月底，我們在兩年內已在全國18個城市共獲得了20個試運營站點。

More than 9,350 secured operational trial flights for low-altitude tourism and ariel sightseeing have been conducted by EH216-S at these sites, which will pave the way for our commercial operations after the certification. Following obtaining the certificate of EH216-S, we will deliver the existing domestic order pipelines in a proper order, which have accumulated to more than 100 units. In the global market, we maintained a proactive engagement within the UAM industry in Asia and Europe cultivating potential customers and partners while conducting AAV test and demonstration flights. In April of this year, EHang was inducted as a member of Japan's Public and Private Committee for Advanced Air Mobility.

EH216-S已在這些地點進行了超過9350架次的低空旅遊和空中觀光安全運營試飛，為取證後的商業運營奠定了基礎。獲得EH216-S證書後，我們將有序交付國內現有訂單管道，目前已累計超過100台。在全球市場，我們積極參與亞洲和歐洲的UAM行業，在開展AAV測試和演示飛行的同時，培養潛在客戶和合作夥伴。今年4月，億航智能成為日本高級空中交通公私委員會成員。

In June, we have successfully completed the test site of EH216-S in Okinawa making Japan's first island-hopping flights by an unmanned eVTOL. Recently, our EH216 Series AAVs successfully completed the test light in Israel and Belgium extending our eVTOL flight footprint to as many as 14 countries around the world. We are confident that as our operations scale and the flight numbers steadily grow and increasing number of our regulators, customers and passengers we'll know more about and appreciate EHang's unique AAV technologies and products enabling more people to enjoy a safe, autonomous, eco-friendly and efficient air mobility experience. It will drive industrial innovations and changes and create more value for the society.

6月，我們在沖繩成功完成了EH216-S的測試場地，實現了日本首次無人駕駛電動垂直起降跳島飛行。最近，我們的 EH216 系列自動駕駛飛行器在以色列和比利時成功完成了試燈，將我們的 eVTOL 飛行足跡擴展到全球多達 14 個國家。我們相信，隨著我們運營規模和航班數量的穩步增長，以及監管機構、客戶和乘客數量的不斷增加，我們將更多地了解和欣賞億航智能獨特的自動駕駛飛行器技術和產品，讓更多人享受到安全、自主、生態的飛行體驗。友好高效的空中交通體驗。它將帶動產業創新變革，為社會創造更多價值。

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

接下來，我將把電話轉給我們的首席財務官理查德。謝謝。

Thank you, Xing. Hello, everyone. Before I go into details, please note that all numbers presented are in RMB and are for the second quarter of 2023, unless stated otherwise. All percentage changes are on a quarter-over-quarter basis unless otherwise specified. Detailed analysis are contained in our earnings press release, which is available on our IR website. I will now highlight some of the key points here.

謝謝你，邢。大家好。在詳細介紹之前，請注意，除非另有說明，否則所有數據均以人民幣為單位，且均為 2023 年第二季度的數據。除非另有說明，所有百分比變化均按季度計算。詳細分析包含在我們的收益新聞稿中，該新聞稿可在我們的投資者關係網站上找到。我現在將強調一些要點。

In Q2, the total revenues were RMB 10 million compared with RMB 22.2 million in Q1 primarily from the delivery of 5 units of EH216-S to the joint venture with Shenzhen listed leading tourism operator in China, Xiyu Tourism. In light that the TC process of EH216-S is approaching the end. Some deliveries have been extended to be post-TC per customer's request. Gross margin stayed at a high level, 60.2% in Q2, a slight decrease of 3.7 percentage points from 63.9% in Q1. Despite this minor fluctuation, our gross margin continued to be notably higher than the players of other types of electric transportation vehicles, such as those electric car companies. This is largely attributed to our unique advantages in the global UAM and eVTOL industries.

第二季度的總收入為人民幣 1,000 萬元，而第一季度的總收入為人民幣 2,220 萬元，主要來自向與深圳上市的中國領先旅遊運營商西域旅遊的合資企業交付 5 台 EH216-S。鑑於EH216-S的TC過程已接近尾聲。根據客戶的要求，某些交付已延長至 TC 後。毛利率維持較高水平，第二季度為60.2%，較第一季度的63.9%小幅下降3.7個百分點。儘管出現小幅波動，我們的毛利率仍然明顯高於其他類型電動交通車輛的參與者，例如那些電動汽車公司。這很大程度上得益於我們在全球UAM和eVTOL行業的獨特優勢。

In Q2, our adjusted operating expenses which are operating expenses, excluding share-based compensation expenses were RMB 58.1 million compared with RMB 50.1 million in Q1. The change was mainly because of increased expenditures related to the conforming aircraft and compliant tests and the final demonstration and verification phase of the EH216-S type certification process. Increased marketing activities to enhance our brand awareness, additional provisions for some long aging accounts receivable, et cetera. As a result, our adjusted operating loss in Q2 was RMB 51.3 million compared with RMB 34.3 million in Q1. Adjusted net loss was RMB 51.8 million, compared with RMB 33.6 million in Q1.

第二季度，我們調整後的運營費用（不包括股權激勵費用）為人民幣 5810 萬元，而第一季度為人民幣 5010 萬元。這一變化主要是因為與合格飛機和合規測試以及EH216-S型式認證過程的最終演示和驗證階段相關的支出增加。增加營銷活動以提高我們的品牌知名度，對一些賬齡較長的應收賬款增加撥備等。因此，我們第二季度調整後的經營虧損為人民幣 5130 萬元，而第一季度為人民幣 3430 萬元。調整後淨虧損為人民幣 5180 萬元，而第一季度為人民幣 3360 萬元。

Furthermore, we have kept optimizing our balance sheet with a prudent approach to cash and liquidity management. As of the end of Q2, we had RMB 160.7 million of cash, cash equivalents and restricted short-term deposits. In July, we have further strengthened our liquidity with a USD 23 million equity investment via a private placement from some long-term strategic investors. The funding will help enhance our liquidity and provide vital support for execution of the post-certification commercial plans in our next phase of growth. This brings our cash reserve to RMB 320.6 million as of the end of July.

此外，我們通過審慎的現金和流動性管理，不斷優化資產負債表。截至二季度末，我們擁有現金、現金等價物和受限短期存款1.607億元人民幣。 7月份，我們通過向一些長期戰略投資者定向增發2300萬美元股權投資，進一步增強了流動性。此次融資將有助於增強我們的流動性，並為我們下一階段增長的認證後商業計劃的執行提供重要支持。截至 7 月底，我們的現金儲備達到人民幣 3.206 億元。

And last, as [Huazhi Hu] mentioned earlier, today is my last time joining the earnings conference call as the company's CFO. I would like to sincerely thank the Board Huazhi Hu and the investment communities for all your trust and support in the past 3 years. It has been my great honor to be part of the force to drive EHang from an innovative technology startup into an industry-leading listed company in the past 8 years. I believe Conor is an ideal successor as CFO, to take EHang to a new stage. I will continue to serve as a senior adviser to the company and wish the company a continued greater success. That concludes our prepared remarks. Let's now open the call for questions.

最後，正如[Huazhi Hu]之前提到的，今天是我最後一次作為公司首席財務官參加收益電話會議。衷心感謝胡華智董事會和投資界三年來的信任和支持。在過去的8年裡，我非常榮幸能夠成為億航智能從一家創新型科技初創公司發展成為行業領先的上市公司的力量中的一員。我相信康納是首席財務官的理想繼任者，能夠將億航智能帶入新的階段。我將繼續擔任公司高級顧問，祝愿公司不斷取得更大成功。我們準備好的發言到此結束。現在讓我們開始提問。

(Operator Instructions) Our first question comes from (inaudible) with Goldman Sachs.

（操作員指示）我們的第一個問題來自（聽不清）高盛。

My first question is about the timeline for the TC because we have finished all of the testing. So just wondering how long it will take for the production cycle. And after we began the TC, how soon that we can expect the full production of our factory.

我的第一個問題是關於 TC 的時間表，因為我們已經完成了所有測試。所以只是想知道生產週期需要多長時間。在我們開始 TC 後，我們的工廠多久才能全面投產。

(inaudible), this is Richard. Thank you for your question. So basically, our team have been continuing working with the CAAC expert team very closely to finish the remaining procedures, which are expected to be completed soon, and the TC will be issued accordingly. Once the TC is issued, this TC is expected to be the first of its kind in the eVTOL industry. And in terms of timing, we will make an announcement at that time. So please stay tuned. In respect of production post-TC, as you know that we have a production facility in Yunfu City. We see initial annual capacity of 600 units of EH216 Series products. So basically, after we obtained the TC, those capacities will be utilized to support the post-TC deliveries in the future.

（聽不清），這是理查德。謝謝你的問題。所以基本上，我們的團隊一直在繼續與民航局專家組密切合作，以完成剩餘的程序，預計很快就會完成，TC將相應地簽發。該TC一旦發布，預計將成為eVTOL行業的首個此類TC。至於時間方面，我們到時候就會發佈公告。所以請繼續關注。關於TC後的生產，大家知道我們在雲浮市有一個生產工廠。我們預計 EH216 系列產品的初始年產能為 600 台。所以基本上，我們獲得TC後，這些產能將用於支持未來TC後的交付。

I have also another follow-up question here for the second half outlook, apart from the TC part, could you also share about the end market demand. For example, for the tourism market recovery, are we still seeing the recovery ongoing for the second half.

我還有一個後續問題，關於下半年的展望，除了TC部分，您能否也分享一下終端市場的需求。例如，對於旅遊市場的複蘇，我們下半年是否還會看到復蘇。

Okay. So basically, on the demand side, our existing order pipeline has accumulated to more than 100 units in China. And this pipeline is expected to continue to increase. To give you some examples. In our previous press release, we announced our cooperation with Xiyu Tourism and this cooperation will further lead to a potential order demand for about 120 units in the future 5 years. Additionally, our strategic partnership with the Bao'an District of Shenzhen City is not only a very important step for our post-TC commercial operations, but also expected to help generate potential order demands gradually. As far as the tourism market is concerned, it is the continuing recovery and increasing demands in the tourism market, for sure, are a very key driver for our ongoing revenue growth.

好的。所以基本上，在需求方面，我們在中國現有的訂單渠道已經積累到了100多台。並且這一管道預計將繼續增加。給你一些例子。在我們之前的新聞稿中，我們宣布了與西域旅遊的合作，此次合作將進一步帶來未來5年約120台的潛在訂單需求。此外，我們與深圳市寶安區的戰略合作不僅是我們TC後商業運營的非常重要的一步，也有望幫助逐步產生潛在的訂單需求。就旅遊市場而言，旅遊市場的持續復甦和不斷增長的需求無疑是我們收入持續增長的一個非常關鍵的推動力。

Additionally, our innovative products are more in line with the customer needs in a scenario such as aerial sightseeing and flight experience [sector] compared to the traditional [helicopters]. Further, we are about to obtain the TC, which means commercial operation will be soon and since the beginning of this year, more and more cities in China have been issuing preferential policies to promote the development of what is called low-altitude economy and unmanned aerial vehicle applications, which mainly include UAM and eVTOL's, so this has also created a very favorable policy environment to accelerate the development of this new industry.

另外，我們的創新產品比傳統的【直升機】更符合客戶在空中觀光、飛行體驗等場景的需求。另外，我們即將獲得TC，這意味著商業運營即將到來，今年以來，中國越來越多的城市出台了促進低空經濟和無人駕駛發展的優惠政策。飛行器應用主要包括UAM和eVTOL，因此這也為加速這一新興產業的發展創造了非常有利的政策環境。

To further give you an example, the Shenzhen City. The Shenzhen City is a Civil Unmanned Aviation pilot zone pilot approved by the CAAC and Shenzhen City has been planning to issue policies such as regulation to promote low-altitude economy industries this year. This is expected to become China's first regulation to support the development of the low-altitude economy sectors and the Shenzhen's measures to support high-quality development of low-altitude economy are expected to provide strong support to the development of the industry. Basically, both initiatives are expected to bolster our operations and revenue growth once we commence our projects in Shenzhen. Further, as a company based in the Greater Bay Area, we have abundant experience and the resources in the area, which will make our collaboration with the local cities more practical and viable.

再舉一個例子，深圳市。深圳市是民航局批准的民用無人機試驗區試點，深圳市今年已計劃出台監管等政策促進低空經濟產業發展。這有望成為我國首個支持低空經濟行業發展的規定，深圳支持低空經濟高質量發展的舉措也有望為行業發展提供有力支撐。基本上，一旦我們在深圳啟動項目，這兩項舉措預計將促進我們的運營和收入增長。此外，作為一家立足於大灣區的公司，我們在該地區擁有豐富的經驗和資源，這將使我們與當地城市的合作更加務實和可行。

Next question will come from the line of from (inaudible) Securities.

下一個問題將來自（聽不清）證券。

I have 2 questions. The first one is we noticed recently, China has published an enforcement stating that certain unmanned aircraft will face an [export prohibition]. Will there be any implication for our aircraft or hindered TC process? And the second question is can the management team shed more light on potential application scenario that could be implemented in the near future?

我有 2 個問題。第一個是我們最近注意到，中國發布了一項強制措施，規定某些無人機將面臨【禁止出口】。會對我們的飛機造成影響或阻礙 TC 進程嗎？第二個問題是管理團隊能否進一步闡明可以在不久的將來實施的潛在應用場景？

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

這又是理查德。我會回答你的問題。所以基本上，對於你的第一個問題，我想說，首先，億航作為一家國際上市公司，我們一直嚴格遵守中國和我們開展業務的其他國家的[ICAO]相關法律法規，並遵守遵守國際民航組織活動的合法性和合規性原則。最近中國新出台的與無人機相關的國際民航組織管制政策基本上對我們的業務或我們的TC流程沒有重大影響，因為我們已經遵守了國際民航組織產品的相關出口許可要求。一切進展順利。

In addition, the spokesperson of the Ministry of Commerce has stated that export control does not mean [export prohibition]. So as long as the UAV products exported are for legitimate civilian uses and the company follow the relevant procedures, it is understood that exporting activities can be conducted normally. And we are dedicated to leveraging our innovative technologies and products to serve the people around the world. The company had been taking strict and proved measures in compliance management and customer restrictions in order to make sure our products are only used for legal [civil uses].

此外，商務部新聞發言人曾表示，出口管制並不等於【禁止出口】。因此，只要出口的無人機產品屬於合法民用，且企業履行了相關程序，據了解，出口活動是可以正常進行的。我們致力於利用我們的創新技術和產品為世界各地的人們服務。公司在合規管理和客戶限制方面一直採取嚴格且行之有效的措施，以確保我們的產品僅用於合法的[民用]。

And in respect to your second question, as you know, after our EH216-S get its TC our [first part] already will be focusing on the so-called low-altitude tourism market. We will continue to team up with tourism operators and partners as many as possible in China for operations in scenarios like aerial sightseeing, flight experiencing, et cetera. Location-wise, initial ones, such as the [Jishou Aizhai] scenic area, (inaudible) scenic area, the lake of Heaven of Tianshan scenic area, and Shenzhen OH Bay area which we announced previously. Furthermore, we will continue to leverage our EH216 Series product platform to explore other use cases such as aerial logistics, emergency response, medical deliveries, aerial firefighting et cetera.

關於你的第二個問題，正如你所知，我們的EH216-S獲得TC後，我們的[第一部分]已經將重點放在所謂的低空旅遊市場上。我們將繼續與國內盡可能多的旅遊運營商和合作夥伴合作，開展空中觀光、飛行體驗等場景的運營。從位置上來說，初步的，比如我們之前公佈的【吉首矮寨】景區、（聽不清）景區、天山天湖景區、深圳OH灣景區。此外，我們將繼續利用我們的EH216系列產品平台探索其他用例，例如空中物流、應急響應、醫療運送、空中消防等。

No more questions in the queue at this time. Let me turn the call back to Ms. Anne for closing remarks.

目前隊列中沒有更多問題。讓我把電話轉回給安妮女士，讓她致閉幕詞。

Thank you, operator, and thank you all for participating on today's call. If you have further questions, please contact our IR forum by e-mail or participating in our following investor events through the calendar information provided on our website. And we appreciate your interest and look forward to our next earnings call.

謝謝接線員，也感謝大家參加今天的電話會議。如果您還有其他疑問，請通過電子郵件聯繫我們的投資者關係論壇或通過我們網站上提供的日曆信息參加我們的以下投資者活動。我們感謝您的關注，並期待我們的下一次財報電話會議。

Thank you all again. This concludes today's conference call. You may now disconnect. Everyone, have a wonderful day.

再次感謝大家。今天的電話會議到此結束。您現在可以斷開連接。祝大家度過美好的一天。

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

[本文字記錄中標記為[已翻譯]的部分是由現場通話中的口譯員朗讀的。]