EHang Holdings Ltd (EH) 2023 Q4 法說會逐字稿

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 on Anne Ji, EHang's Senior Director of Investor Relations. Ms. Anne, please proceed.

女士們、先生們，大家好。感謝您的支持，歡迎參加億航2023財年第四季和年度財報電話會議。提醒一下，我們正在錄製今天的通話。現在，我將會議交給億航智慧投資者關係高級總監 Anne Ji。安妮女士，請繼續。

Hello, everyone. Thank you for joining us on today's conference call to discuss the Company's financial results for the fourth quarter and fiscal year of 2023. The earnings release is available on the Company's IR website. Please note the conference call is being recorded and the audio replay will be posted on the Company's IR website.

大家好。感謝您參加今天的電話會議，討論公司 2023 年第四季和財年的財務表現。收益報告可在公司的 IR 網站上查閱。請注意，電話會議正在錄音，音訊重播將發佈在該公司的 IR 網站上。

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

今天的電話會議由我們的創辦人、董事長兼執行長胡華志先生主持；以及財務長兼董事會董事楊康納先生。管理團隊將依序發表準備好的發言。中文發言後將附有英文翻譯。所有翻譯僅是為了方便目的。若有任何差異，以管理階層原文聲明為準。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 US 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 these 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. Also, please note that all numbers presented are in RMB and are for the fourth quarter and fiscal year of 2023, unless stated otherwise.

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，公司的實際業績可能與今天表達的預期有重大差異。有關這些和其他風險和不確定性的更多資訊包含在公司向美國證券交易委員會提交的公開文件中。除適用法律要求外，本公司不承擔更新任何前瞻性聲明的義務。另請注意，除非另有說明，所有數字均以人民幣計算，且適用於 2023 年第四季和財政年度。

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

現在，我將把電話轉給我們的執行長胡華志先生。胡先生，請講。

(Spoken in foreign language)

（用外語說）

This is the English translation of Mr. Hu's remarks.

這是胡先生講話的英文翻譯。

(interpreted) Hello, everyone. Thank you for joining us on this conference call.

（譯）大家好。感謝您參加我們的電話會議。

In the fourth quarter of 2023, we have achieved remarkable results across various aspects. In October last year, our EH216-S pilotless passenger-carrying aircraft system, an innovative product independently developed by EHang, obtained the Type Certificate (TC) from the CAAC. This milestone marks the world's first TC for a passenger-carrying eVTOL aircraft, signifying our qualification for commercial applications of pilotless passenger-carrying eVTOL aircraft. In December last year, our first certified EH216 rolled off our production line and obtained the world's first eVTOL standard airworthiness certificate, which is AC. As a result, we commenced the delivery of the certified EH216-S aircraft.

2023年第四季，我們各方面都取得了令人矚目的成就。去年10月，億航自主研發的創新產品EH216-S無人駕駛載客飛機系統獲得了中國民航局頒發的型號合格證（TC）。這一里程碑標誌著世界上第一個載客eVTOL飛機的TC，標誌著我們獲得了無人駕駛載客eVTOL飛機商業應用的資格。去年12月，我們首架獲得認證的EH216下線，並獲得了全球首個eVTOL標準適航證，即AC。由此，我們開始交付經過認證的 EH216-S 飛機。

Following the TC and AC, we are delighted to see a substantial surge in market demands for our EH216-S pilotless passenger-carrying eVTOL, resulting in significant sales volume growth in the fourth quarter, with a total of 23 units of EH216 series products delivered. Notably, this represents the highest number of deliveries in a single quarter in the past three years. The revenue of the fourth quarter surpassed RMB56 million, marking a year-over-year growth rate of over 3 times and nearly doubling quarter over quarter. Moreover, we generated positive operating cash flow in the fourth quarter as demands for our products is strong and the Company's operations continue to steadily improve.

繼TC和AC之後，我們很高興看到，我們的EH216-S無人駕駛載客eVTOL產品市場需求大幅增長，帶動第四季度銷量大幅增長，共交付23台EH216系列產品。值得注意的是，這是過去三年來單季交付量最高的一次。第四季營收超過5,600萬元，較去年同期成長超過3倍，較上季成長近一倍。此外，由於我們產品的需求強勁且公司營運持續穩定改善，我們在第四季度產生了正的營運現金流。

Our strong growth was attributed to the proactive policies and support from local Chinese municipal governments that are actively fostering the high-quality development of the low-altitude economy. Since the Central Economic Work Conference chaired by President Xi in December last year, when the low-altitude economy was elevated to a strategic emerging industry, nearly 20 provinces in China have incorporated the low-altitude economy into their 2024 government work reports. Furthermore, during the "Two Sessions" recently held in China, the central government's work report included the low-altitude economy for the first time. This recognition underscores the expectation that the low-altitude economy will serve as a new growth engine for China, a globally competitive emerging industry, and a vital sector for nurturing and advancing new high-quality productive forces. According to research institutions' estimate, the market size of China's low-altitude economy surpassed RMB500 billion in 2023 and is expected to reach RMB2 trillion by 2030. This represents a substantial emerging market, and pilotless passenger-carrying aerial vehicles like the EH216-S are poised to play a leading role in propelling the industry forward.

我們的強勁成長歸功於中國地方政府積極的政策和支持，積極促進低空經濟的高品質發展。自去年12月習近平主持召開中央經濟工作會議，將低空經濟上升為戰略性新興產業以來，全國已有近20個省份將低空經濟寫入2024年政府工作報告。此外，在前不久召開的全國「兩會」上，低空經濟首次被寫入中央政府工作報告中。這項認知彰顯了人們對低空經濟將成為中國新的成長引擎、具有全球競爭力的新興產業以及培育和發展高品質新生產力的重要領域的期望。據研究機構預計，2023年中國低空經濟市場規模將突破5,000億元，預計2030年將達2兆元。這代表著一個巨大的新興市場，而像 EH216-S 這樣的無人駕駛載客飛行器將在推動該行業向前發展方面發揮主導作用。

Capitalizing our first-mover advantage in obtaining airworthiness certification and benefiting from favorable policies, we have witnessed a surge in market demands and enthusiasm for our EH216 series products. In the fourth quarter, we received hundreds of pre-orders from domestic and overseas customers in China's Guangzhou, Hefei, Wuhan, and the UAE and other regions. Furthermore, we have recently formed a partnership with the government of Wuxi City in Jiangsu Province, resulting in pre-orders for at least 100 units of EH216-S. Through these collaborations, we are actively planning to create low-altitude economy demonstration applications in the area. The strong market demands from our customers give us great confidence in our future growth prospects.

我們充分發揮適航取證的先發優勢與政策利好，EH216系列產品市場需求與熱情大幅提升。第四季度，我們收到來自中國廣州、合肥、武漢、阿聯酋等地區國內外客戶的數百份預訂單。此外，我們最近與江蘇省無錫市政府建立了合作夥伴關係，預訂了至少 100 台 EH216-S。透過這些合作，我們正在積極規劃在該地區創建低空經濟示範應用。客戶強勁的市場需求使我們對未來的成長前景充滿信心。

We have also announced the pricing of the EH216-S pilotless passenger-carrying aircraft system in both the domestic Chinese market and overseas markets. The pricing has been set at RMB2.39 million for the Chinese market and US$410,000 for international markets. We believe these prices are highly competitive when compared to other eVTOL products worldwide. Moreover, this pricing strategy aligns with market demands and contributes to the development of the low-altitude economy.

我們也公佈了EH216-S無人駕駛載客飛機系統在中國國內市場和海外市場的定價。中國市場的定價為239萬元人民幣，國際市場的定價為41萬美元。我們相信，與全球其他 eVTOL 產品相比，這些價格極具競爭力。而這種定價策略符合市場需求，有助於低空經濟的發展。

In preparation for the next stage of mass production, our efforts to obtain the Production Certificate, which is PC, is almost completed. Currently, the CAAC review team has conducted all the on-site inspections and all the required quality system documents have been submitted to the CAAC for the final process. The PC is expected to be obtained in the near future, offering a robust assurance and support for the production quality of newly-produced EH216-S under the supervision system of the CAAC.

為了準備下一階段的大規模生產，我們取得 PC 生產證書的努力已幾乎完成。目前，中國民航局審查小組已完成全部現場檢查，所有必要的品質系統文件都已提交中國民航局進行最後的審核。該PC預計將於近期取得，為中國民航局監管體系下新生產EH216-S的生產品質提供有力的保證和支持。

During the fourth quarter, we developed several low-altitude economy demonstration sites in Shenzhen, Guangzhou and Hefei, and our EH216-S completed the first commercial flight demonstrations at the UAM operation center in Shenzhen OH Bay, Jiulong Lake Park in Guangzhou's Huangpu District, and Luogang Central Park in Hefei. The Hefei municipal government has reached a strategic cooperation agreement with EHang in the low-altitude economy, planning to extend support to EHang in various forms with a target amount of US$100 million, while the Guangzhou municipal government announced 10 major supportive policies to stimulate the low-altitude economy.

第四季度，我們在深圳、廣州、合肥等地開發了多個低空經濟性示範點，其中EH216-S在深圳奧灣UAM運營中心、廣州黃埔區九龍湖公園、合肥蘿崗中心公園等地完成首次商業飛行演示。合肥市政府與億航達成低空經濟戰略合作協議，計劃以多種形式給予億航支持，目標金額達1億美元；廣州市政府則出台十大扶持政策，助力低空經濟。

Currently, we are actively conducting a series of crucial preparations for commercial operations, including operator training and the development of our operation systems. By leveraging our distinctive and pioneering expertise in pilotless eVTOL operations, EHang continues to strengthen collaboration with the CAAC, to establish the world's first regulatory system standards for eVTOL commercial operations by the second quarter of this year. These efforts will set reliable regulations and benchmarks for the safety operations in eVTOL industry.

目前，我們正在積極開展運營商培訓、營運系統開發等一系列商業運營的重要準備工作。憑藉在無人駕駛 eVTOL 營運領域獨特且開創性的專業知識，億航智慧不斷加強與中國民航局的合作，計劃在今年第二季前建立全球首個 eVTOL 商業營運監管體系標準。這些努力將為 eVTOL 產業的安全營運制定可靠的規範和基準。

In 2024, we will coordinate with multiple governments to complete the construction of infrastructure such as eVTOL vertiports, shape benchmark cities that exemplify the potential of the low-altitude economy, and launch commercial operations ceremonies in key use cases, such as aerial tourism and urban air taxis. This will allow the scenes from science fiction movies to officially step into the public eyes.

2024年，我們將協同多國政府完成eVTOL垂直起降機場等基礎建設，塑造體現低空經濟潛力的標竿城市，並在空中旅遊、城市空中出租車等關鍵用例中啟動商業運營儀式。這將讓科幻電影中的場景正式進入公眾的視野。

In terms of industry chain, we have been actively cooperating with outstanding suppliers and partners, striving to expand opportunities within the low-altitude economy sector. In January, we entered into a strategic partnership with Gotion, a leading global provider of new energy solutions, to jointly research and develop battery cells, battery packs, energy storage systems and charging infrastructure especially designed for pilotless aerial vehicles. In February this year, we partnered with Guangzhou Automobile Group (GAC in short), which will capitalize on GAC's extensive experience and well-established industrial chain in intelligent manufacturing, to accelerate the smart production, application, and market expansion of our pilotless aerial vehicles.

在產業鏈方面，我們積極與優秀供應商及合作夥伴合作，並努力拓展低空經濟領域的機會。1月，我們與全球領先的新能源解決方案供應商國軒高科達成策略合作夥伴關係，共同研發專為無人機設計的電池單元、電池組、儲能係統和充電基礎設施。今年2月，我們與廣汽集團達成合作，將利用廣汽在智慧製造領域的豐富經驗與完善的產業鏈，加速推進公司無人機的智慧化生產、應用和市場拓展。

Regarding product development, we will continue to enhance our EH216-S' performance to unlock its full potential for various applications. To this end, last year we strategically invested in InX, a solid-state lithium battery company based in Shenzhen, to strengthen the supply chain for solid-state lithium batteries in eVTOLs. Lithium metal solid-state batteries offer significant advantages over liquid batteries in terms of safety, energy density, thermal stability, cruising range, charging and discharging performance, etc. As a result, we believe that the flight range and many other performances of our EH216-S product will be greatly enhanced in the future.

在產品開發方面，我們將繼續提高 EH216-S 的性能，以充分發揮其在各種應用中的潛力。為此，去年我們策略投資了位於深圳的固態鋰電池公司InX，以加強eVTOL固態鋰電池的供應鏈。鋰金屬固態電池在安全性、能量密度、熱穩定性、續航里程、充放電性能等方面相比液態電池有著明顯的優勢，因此我們相信未來我們的EH216-S產品的續航里程等多項性能都會得到大幅提升。

Furthermore, this year, we will devote more R&D efforts toward testing and certification of our VT-30, another pilotless passenger-carrying lift-and-cruise eVTOL model. This is a long-range aircraft designed for inter-city transportation. We will conduct rigorous testing on all systems of the VT-30 and full transition flights in the near term. Based on the test results, we will thoroughly analyze and actively iterate improvements to ensure that all the performance indicators meet design requirements. Myself have experienced a flight with VT-30 in person, and it feels amazing. Meanwhile, we are also doing preparations for the TC application for VT-30.

此外，今年我們將投入更多的研發力量，對我們的 VT-30（另一款無人駕駛載客升力巡航 eVTOL 模型）進行測試和認證。這是一架專為城際運輸設計的遠程飛機。我們將在近期對VT-30的所有系統和全面過渡飛行進行嚴格測試。根據測試結果，我們會深入分析、積極迭代改進，確保各項效能指標符合設計要求。我自己曾親身體驗過VT-30的飛行，感覺棒極了。同時，我們也在為VT-30的TC申請做準備。

Just a few days ago, we commenced another tour of passenger-carrying flights across several cities in Japan. I would like to extend my thanks to our COO, Mr. Xin Fang, who is currently at our Japan events and thus unable to attend this earnings call.

就在前幾天，我們又開始了飛越日本多個城市的載客飛行之旅。我要向我們的首席營運官方鑫先生表示感謝，他目前正在參加日本活動，因此無法出席本次財報電話會議。

Next, I will turn the call over to our CFO, Conor, thank you.

接下來，我將把電話轉給我們的財務長康納，謝謝。

Thank you, Mr. Hu. Hello, everyone. This is Conor. Before I go into details, please note that all numbers presented are in RMB and are for the fourth quarter and the fiscal year of 2023, unless stated otherwise. Detailed analyses are contained in our earnings press release, which is available on our IR website. I will now highlight upon some of the key points here.

謝謝胡先生。大家好。這是康納。在我詳細介紹之前，請注意，除非另有說明，所有數字均以人民幣計算，且均為 2023 年第四季和財政年度的數據。詳細分析包含在我們的收益新聞稿中，您可以在我們的 IR 網站上查閱。現在我將強調這裡的一些關鍵點。

Having obtained the TC and AC for our proprietary EH216-S, our total revenues reached RMB56.6 million in Q4, a significant increase of 260.9% from RMB15.7 million in the same period last year, and a remarkable increase of 97.8% from RMB28.6 million in Q3. The increases were primarily attributed to the increase in our sales volume of EH216 series products. We delivered 23 units of EH216-S, up 283% year over year, and 77% quarter over quarter. For the fiscal year 2023, total revenue were RMB117.4 million, a significant increase of 165% from RMB44.3 million in 2022. The EH216 series of AAV deliveries in 2023 were 52 units, up 148% from 21 units in 2022.

在取得自主智慧財產權的EH216-S的TC和AC後，第四季公司總營收達到5,660萬元，較去年同期的1,570萬元大幅成長260.9%，較第三季的2,860萬元大幅成長97.8%。成長主要歸因於EH216系列產品銷售增加。我們交付了 23 台 EH216-S，年增 283%，季增 77%。2023財年總收入為人民幣1.174億元，較2022年的人民幣4,430萬元大幅成長165%。2023 年 EH216 系列 AAV 交付量為 52 架，較 2022 年的 21 架成長 148%。

Gross margin remained stable at a high level of 64.7% in Q4, flat from 64.6% in Q3. Gross margin was 64.1% in 2023 despite a slight decrease of 1.8 percentage points from 65.9% in 2022, primarily due to changes in revenue mix. These represent the continued high gross margin levels as a result of our competitive strength and first-mover advantages in the global UAM and eVTOL industries.

第四季毛利率維持穩定在64.7%的高位，與第三季的64.6%持平。2023 年毛利率為 64.1%，儘管較 2022 年的 65.9% 略有下降 1.8 個百分點，但這主要是由於收入結構的變化。這些表明，由於我們在全球 UAM 和 eVTOL 行業的競爭實力和先發優勢，毛利率持續處於高位。

In Q4, our adjusted operating expenses, which are operating expenses excluding share-based compensation expenses, were RMB64.2 million, down 12.4% from RMB73.2 million in the same period last year and up 18.8% from RMB54 million in Q3. The quarter-over-quarter increase was primarily driven by the expansion of sales channels and intensified marketing efforts in enhancing brand awareness. On an annual basis, the adjusted operating expenses were RMB226.3 million in 2023, down 6.6% from RMB242.4 million in 2022.

第四季度，我們的調整後營業費用（即不包括股權激勵費用的營業費用）為人民幣 6,420 萬元，較去年同期的人民幣 7,320 萬元下降 12.4%，較第三季度的人民幣 5,400 萬元增長 18.8%。環比成長主要得益於銷售管道的擴大以及為提升品牌知名度而加大的行銷力度。以年計算，2023年調整後營業費用為人民幣2.263億元，較2022年的人民幣2.424億元下降6.6%。

As a result, our adjusted operating loss in Q4 was RMB24.9 million, a 59.4% improvement from RMB61.3 million in the same period last year and a 27.3% improvement from RMB34.2 million in Q3. For the fiscal year, adjusted operating loss was RMB144.8 million, a 30.1% improvement from RMB207.1 million in 2022. Adjusted net loss in Q4 was RMB22.1 million, a 62.8% improvement from RMB59.4 million in the same period last year and a 29.4% improvement from RMB31.3 million in Q3. For the fiscal year, adjusted net loss was RMB138.8 million in 2023, a 32.7% improvement from RMB206.2 million in 2022.

因此，我們第四季的調整後經營虧損為人民幣2,490萬元，較去年同期的人民幣6,130萬元改善59.4％，較第三季的人民幣3,420萬元改善27.3％。本財年調整後營運虧損為人民幣1.448億元，較2022年的2.071億元改善30.1%。第四季調整後淨虧損為2,210萬元人民幣，較去年同期的5,940萬元增加62.8%，較第三季的3,130萬元改善29.4%。就本財年而言，2023年調整後淨虧損為1.388億元，較2022年的2.062億元改善32.7%。

Thanks to our stringent approach to cash and liquidity management, I would like to highlight that we achieved positive cash flow from operations in Q4, further strengthening our balance sheet. As of the end of Q4, we had RMB334.1 million of cash, cash equivalents, short-term deposits, short-term investments and restricted short-term deposits balances. We are also actively in discussions with several commercial banks regarding the expansion of credit facilities, although our current cash position and expected cash flow from operations would be sufficient to fulfill our cash needs for us to reach profitability in the near future.

由於我們採取了嚴格的現金和流動性管理方法，我想強調的是，我們在第四季度實現了正的營運現金流，進一步增強了我們的資產負債表。截至第四季末，我們擁有現金、現金等價物、短期存款、短期投資和受限短期存款餘額為人民幣3.341億元。我們也積極與多家商業銀行討論擴大信貸規模的事宜，儘管我們目前的現金狀況和預期的經營現金流足以滿足我們的現金需求，從而使我們在不久的將來實現盈利。

Looking ahead with our steady progress towards obtaining PC for mass production and deliveries, we anticipate achieving revenues of about RMB58 million in Q1 this year, representing an increase of 161% year over year.

展望未來，隨著PC量產和交付的穩定推進，預計今年第一季可實現營業收入約5,800萬元，年增161%。

That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead. Thank you.

我們的準備好的演講到此結束。現在讓我們開始提問。接線員，請繼續。謝謝。

(Operator Instructions) The first question comes from the line of Rong Zhao from TF.

(操作員指示)第一個問題來自TF的趙榮。

Hi, management. Thank you for taking my question. My first question is really about the order size. With large-scale deliveries becoming possible after obtaining the TC, have you seen an increase in customer interest that has actually converted into more orders compared to before? Thank you.

你好，管理層。感謝您回答我的問題。我的第一個問題實際上是關於訂單大小。獲得 TC 後，可以進行大規模交付，與以前相比，您是否看到客戶興趣增加，並且實際上轉化為了更多的訂單？謝謝。

Yes. Thank you for your question. As the low-altitude economy industry grows rapidly, we have seen an increasing demand for our EH216-S from both government-related and scenic spots operators. In the first quarter, we received an intentional purchase order of 100 units from the Wuxi Municipal Government, with deliveries by stages and with a more similar purchases order to come.

是的。感謝您的提問。隨著低空經濟產業的快速發展，我們看到政府相關和景區營運商對我們的 EH216-S 的需求不斷增加。一季度，我們獲得無錫市政府100台的意向訂單，將分階段出貨，後續還會有更多類似的採購訂單。

With the supportive policies and growing demand, our EH216-S is poised to demonstrate our first-mover advantage in the global market this year, contributing to EH's stable growth. Other than Hefei, Shenzhen, Guangzhou, Wuxi, we also see similar demand from Shanxi, Henan, Wuhan, Zhuhai, Hainan, and many, many other orders to come. Thank you.

在政策支持和需求成長的帶動下，我們的EH216-S將在今年的全球市場上展現先發優勢，為EH的穩定成長做出貢獻。除了合肥、深圳、廣州、無錫以外，我們還看到來自山西、河南、武漢、珠海、海南等地有類似的需求，未來還有大量訂單即將到來。謝謝。

All right, thank you. My second question is about the competition landscape. Could you elaborate on your target customers and how you differentiate yourself from competitors? Also, could you provide further insights into the competitive landscape? Thank you.

好的，謝謝。我的第二個問題是關於競爭格局。您能否詳細說明您的目標客戶以及您與競爭對手的差異？此外，您能否對競爭格局提供進一步的見解？謝謝。

Yes, October last year, we have obtained the first TC and the end of last year, we have obtained the first AC. This is the world's first of its kind in this industry. While many other eVTOL companies and peers in China and overseas are still undergoing prototype testing and also the application for the TC. In the next year and half to two years, basically, we will be the only company that can commercialize for eVTOL.

是的，去年十月我們獲得了第一個TC，去年年底我們獲得了第一個AC。這是全球該產業首創。而國內外許多其他eVTOL公司和同業仍在進行原型測試和TC的應用。在未來的一年半到兩年內，基本上我們將是唯一一家能夠實現 eVTOL 商業化的公司。

Compared our product to other EVTOL products, we have several advantages. Firstly, we have a very compact fuselage, measuring around 6 meters in length, and very lightweight design. That means we have the lowest demand on urban infrastructure, making our product highly adaptable and very easy to deploy within the city.

我們的產品與其他 EVTOL 產品相比，有幾個優勢。首先，我們的機身非常緊湊，長約 6 米，而且設計非常輕巧。這意味著我們對城市基礎設施的要求最低，從而使我們的產品適應性強，並且非常容易在城市內部署。

Secondly, our EH216-S is a two-seater without pilot. With the pre-determined routes, that will eliminate the need for pilot training, hiring costs, and potential safety issues related to human errors in piloting. Also, by utilizing our autonomous technologies and command-and-control system, fleet management can be achieved. So that will enable us to operate in a mass scale in the future.

其次，我們的EH216-S是雙座無飛行員飛機。有了預先決定的航線，就不需要進行飛行員培訓，也不需要僱用飛行員，也不需要擔心人為駕駛失誤導致的潛在安全問題。此外，透過利用我們的自主技術和指揮控制系統，可以實現車隊管理。這將使我們能夠在未來大規模地開展業務。

And also, our price is very very competitive with a domestic selling price of RMB2.39 million and international selling price of US$410,000. In comparison, as far as we know, our other global peers will be selling at between US$3 million to US$10 million. From customer's point of view, we think that our customer can be profitable with that or enable our business to sustain in the longer term. With all those advantages, we think we are very very competitive. EH216-S is for intracity, the short range. For the long distance, we also have a product line of VT-30 that Mr. Hu has mentioned earlier that we plan to send for TC application sometime this year. Thank you.

而且我們的價格非常有競爭力，國內售價為239萬元人民幣，國際售價為41萬美元。相較之下，據我們所知，我們其他全球同行的售價將在 300 萬美元至 1000 萬美元之間。從客戶的角度來看，我們認為我們的客戶可以透過此獲得利潤或使我們的業務能夠長期維持。憑藉所有這些優勢，我們認為我們的競爭力非常強。EH216-S 適用於城內、短距離。對於長距離，我們還有胡先生之前提到的VT-30產品線，我們計劃在今年某個時候將其送去進行TC申請。謝謝。

All right, thank you. That's very clear.

好的，謝謝。這非常清楚。

Rongyan Zhou from CITICS.

中信證券的周榮彥。

I have two questions. The first question is about the eVTOL market size. How big do you think it will be in the future? Which application scenario is likely to be the first for launch? What is management's outlook for the total market size?

我有兩個問題。第一個問題是關於 eVTOL 市場規模。您認為未來它會發展到多大？哪些應用場景可能率先推出？管理階層對整個市場規模的展望如何？

(interpreted) At the end of last year, the central government at the very top level of China had a central committee meeting. After this meeting the top authority of China has indicated that the low-altitude economy is one of the strategic industries that the government is going to focus on for this year.

(翻譯) 去年年底，中國中央最高層召開了中央委員會會議。這次會議後，國家高層表示，低空經濟是政府今年重點發展的戰略產業之一。

Through the central economic meeting, currently, there are more than 20 provincial governments that have formally listed the low-altitude economy as their focus for this year.

透過中央經濟工作會議，目前，已有20多個省級政府正式把發展低空經濟列為今年的工作重點。

Through the focus of the central and local governments that autonomous passenger-grade aircraft will be applied to not only for tourism but also for urban transportation as integrated as part of the city's transportation system. Also, as in the future that's not very long, the air taxi scenario will come true.

透過中央和地方政府的重點關注，自主載客飛機將不僅適用於旅遊業，還將應​​用於城市交通，成為城市交通系統的一部分。而且，在不久的將來，空中計程車的場景就會成為現實。

Some institutions estimated that the total market size of the low-altitude economy in 2023 in China has reached RMB500 billion, and expected it to grow to RMB2 trillion by 2030.

有機構預計，2023年我國低空經濟總市場規模已達5,000億元，預計2030年將成長至2兆元。

We expect to operate the air taxi, make it a real scenario, sometime this year. Air taxi is a transportation vehicle that the people can use and transfer from their regular transportation from one dimension to three dimensions. This will greatly enhance the total market size of eVTOL.

我們預計今年某個時候空中計程車就能投入運營，並成為現實。空中計程車是一種可以幫助人們從一維空間轉移到三維空間的交通工具。這將大大提升eVTOL的整體市場規模。

Okay, thank you. Thanks very much for the answer from CEO, Mr. Hu. My next question is about our expense. In fact, as a company grows, the company's sales and operation costs will be managed more precisely. Would you mind sharing more details regarding the expenses in the future just for our company? Thank you.

好的，謝謝。非常感謝胡總裁的回答。我的下一個問題是關於我們的費用。事實上，隨著公司的發展，公司的銷售和營運成本將得到更精確的管理。您介意分享更多有關我們公司未來開支的詳細資訊嗎？謝謝。

Yes, regarding to our operating expenses, which are composed of sales and marketing, G&A and also research and development, as we ramp up our revenue, you can see that the fourth quarter 2023, for example, we have reached revenue of RMB56 million with a year-on-year growth rate of 260%. When the revenue growth at such a speed, our adjusted operating expenses at fourth quarter last year was 113% of total revenue. That compared to one year ago, our adjusted operating expenses were 466% of revenue. You can see the rapid drop of OPEX due to rapid increase in our revenue.

是的，關於我們的營運費用，包括銷售和行銷、一般行政費用以及研發費用，隨著我們收入的增加，你可以看到，例如，在 2023 年第四季度，我們的收入達到人民幣 5,600 萬元，年增 260%。當收入以這樣的速度成長時，我們去年第四季的調整後營業費用佔總收入的113％。與一年前相比，我們的調整後營業費用佔收入的466％。您可以看到由於我們的收入快速增加，OPEX 也快速下降。

We believe that our growth on the revenue will continue to grow at a very high growth rate in the next several years. We hope that we can manage our adjusted operating expenses in three years' time, from current 113% of revenue drop to about 40% of total revenue in three-year-time. Thank you.

我們相信，未來幾年我們的收入成長仍會繼續保持非常高的成長速度。我們希望能夠在三年內管理好我們的調整後營業費用，從目前佔收入113％的降幅，下降到三年內佔總收入的40％左右。謝謝。

Okay, okay. Thanks very much for your answer, and thanks to all of you at the company that helped the low-altitude economy in China's development in future. So that's all my question and thank you, all of you, and have a nice weekend. Thank you.

好的，好的。非常感謝您的回答，也感謝公司各位同仁對未來中國低空經濟的發展給予的幫助。這就是我所有的問題，謝謝大家，祝大家週末愉快。謝謝。

Thank you.

謝謝。

Ting Song from Goldman Sachs.

高盛的宋婷。

Thank you for taking my question. EHang has announced a launch of UAM operation demonstration center with Shenzhen government in December. My question is, do we expect to see any revenues from UAM operation this year besides the sales revenues from shipment of EH216-S? Thank you.

感謝您回答我的問題。億航智能已宣佈12月與深圳市政府合作啟動城市空中交通營運展示中心。我的問題是，除了 EH216-S 出貨帶來的銷售收入外，我們預計今年還會從 UAM 營運中獲得任何收入嗎？謝謝。

Yes. As Mr. Hu mentioned earlier, the Company plans to kick off the commercial operations this year with pioneering UAM projects in some selected cities in China. For use cases like aerial tourism, sightseeing, air taxi and so on. Therefore, we expect to receive some initial revenues from operational flight services, but it may not be significant this year. In the current and initial stage, the majority of our revenue will still coming from sales of our EH216 series for the time being.

是的。正如胡先生之前所提到的，該公司計劃今年在中國部分城市啟動商業運營，並率先推出城市空中交通項目。適用於航空旅遊、觀光、空中計程車等用例。因此，我們預計從營運航班服務中獲得一些初始收入，但今年可能不會那麼多。在現階段和初始階段，我們的大部分收入暫時仍將來自於EH216系列的銷售。

Looking forward, as we expand flight services to more areas, recurring revenue such as operational revenues will grow gradually. We have been receiving orders, domestic and overseas, and we also receive a lot of requests from our customers to form a joint venture for the future operation. We expect that next year and going forward, the revenue coming out from operation will gradually increase in the percentage of our total revenue. Thank you.

展望未來，隨著我們拓展航班服務至更多地區，營運收入等經常性收入將逐步成長。我們不斷接到國內外的訂單，同時也收到許多客戶希望成立合資企業共同營運的請求。我們預計明年及以後營運收入占我們總收入的比例將逐步上升。謝謝。

Thank you. My other question is about overseas revenues. I see the Company has a partner with overseas companies in Dubai and also some governments in European countries. Do we expect any progress in the overseas market this year or next year? Thank you.

謝謝。我的另一個問題是關於海外收入。我看到該公司與杜拜的海外公司以及一些歐洲國家的政府有合作夥伴。我們預計今年或明年海外市場會取得什麼進展？謝謝。

Yes, after we obtained TC, we also received a very strong demand from overseas markets. As we have announced that we have formed a strategic relationship and also received orders from UAE customer, Wings Logistics. They intend to purchase 100 units. Actually, we will start to deliver the first batch in first quarter of this year.

是的，我們獲得TC之後，也收到了來自海外市場的非常強勁的需求。正如我們所宣布的那樣，我們已經建立了戰略關係並且還收到了阿聯酋客戶Wings Logistics的訂單。他們打算購買 100 台。實際上，我們將在今年第一季開始交付第一批。

As of fourth quarter last year, we also sold our product, EH216, to many places like Colombia, Saudi Arabia, and Qatar, and we also performed drone light shows in Japan and Spain. In the fourth quarter last year, the revenues derived from overseas market was 26% of our total revenues. This year, we also expect a fairly good amount of our revenue will be coming out from overseas markets. Thank you.

截至去年第四季度，我們的產品EH216也銷往哥倫比亞、沙烏地阿拉伯、卡達等許多地方，並在日本和西班牙進行無人機燈光秀。去年第四季度，來自海外市場的營收占我們總營收的26%。今年，我們也預期相當一部分收入將來自海外市場。謝謝。

Yu Chen from Haitong Securities.

海通證券的餘晨。

Okay. Thank you, management. I have two questions. The first one, following the previous one, we would like to know the detailed progress regarding obtaining the overseas AC because if we move to enter the overseas market, we think that the first step is to obtain the overseas AC first.

好的。謝謝管理層。我有兩個問題。第一個問題，承接上一個問題，我們想了解取得海外認證的詳細進展情況，因為如果我們要進入海外市場，我們認為第一步就是先獲得海外認證。

The second one is about our production capacity. We would like to know the capacity regarding EH216 this year and in the following three years, as well as the new VT-30. That's two questions. Thank you.

第二個是關於我們的生產能力。我們想了解今年和未來三年的EH216以及新型VT-30的產能。這是兩個問題。謝謝。

Yes, regarding to overseas TC, as I mentioned earlier, we have seen strong demand from overseas markets, especially in the Middle East, South Africa, and ASEAN countries. For those places, we will rely on our local partner to obtain the local TC. We already obtained the TC from CAAC, so when we apply the overseas TC, we can do a streamlined process called validation of TC, validation of Type Certificate, with the overseas aviation authorities. And this is expected to be a simplified procedure.

是的，關於海外TC，正如我之前提到的，我們看到海外市場需求強勁，特別是中東、南非和東協國家。對於那些地方，我們將依靠當地合作夥伴來獲取當地的 TC。我們已經從中國民航局獲得了 TC，因此當我們申請海外 TC 時，我們可以與海外航空當局進行一個簡化的流程，稱為 TC 驗證、型號合格證驗證。預計這將是一個簡化的程序。

Consequently, this approach enables us to expedite market entry and expansion in these countries. In terms of the order and the production, we are currently receiving a substantial number of orders and pre-orders, which will be fulfilled according to our customers' specific requirements. Typically, the government and customers commit to preorders, or intentional orders, for example, up to 100 units with an initial purchase of 5 to 10 units for trial operations at local sites.

因此，這種方法使我們能夠加快進入和擴張這些國家的市場。在訂單和生產方面，我們目前正在收到大量訂單和預訂單，這些訂單和預訂單將根據客戶的特定要求來滿足。通常，政府和客戶會進行預訂或意向訂單，例如最多 100 台，初始購買 5 到 10 台用於在當地試運行。

As their operations expand and demands increase, then they will acquire additional products. The favorable policies throughout in the low-altitude economy have provided us an attractive environment for growth. Consequently, we anticipate a substantial increase in delivery volume throughout 2024.

隨著業務擴大和需求增加，他們將購買更多產品。低空經濟的各項優惠政策為我們提供了一個頗具吸引力的成長環境。因此，我們預計 2024 年交付量將大幅增加。

This quarter, we have given our guidance at RMB58 million, slightly increased quarter over quarter because the first quarter is the Chinese New Year. Typically, there's a long vacation during the quarter. So far, I look forward that we have seen a very strong demand for orders for this year.

本季度，我們給出的預期為人民幣5800萬元，由於第一季是農曆新年，因此環比略有增加。通常，該季度期間都會有一個長假。到目前為止，我期待看到今年的訂單需求非常強勁。

Currently, our production in Yunfu facility has an annual capacity of 600 units of eVTOL. We are exploring opportunities to establish other facilities to further support our production capacities as market demand grows. Thank you.

目前，我們雲浮工廠的年產能為 600 輛 eVTOL。隨著市場需求的成長，我們正在探索建立其他設施的機會，以進一步支持我們的生產能力。謝謝。

Thank you for answering. Have a nice weekend.

謝謝你的回答。祝你周末愉快。

(Operator Instructions) Laura Li, Deutsche Bank US.

(操作員指示) 德意志銀行美國分行 Laura Li。

Hey, thank you for taking my question, and congratulations on the robust quarter. My first question is about the VT-30, our new product. You mentioned you are already preparing for the testing and the certification now. Are there any specs you can talk about now? Do you expect the client base will be similar to the EH216 or the new product would bring us more applications scenario? Thank you.

嘿，感謝您回答我的問題，並祝賀您本季業績強勁。我的第一個問題是關於我們的新產品 VT-30。您提到您現在正在為測試和認證做準備。現在可以談什麼規格嗎？您是否預期客戶群將與 EH216 相似或新產品將為我們帶來更多的應用場景？謝謝。

(interpreted) Actually, we are doing the R&D work for the VT-30 during our certification in the past few years. We have done some internal testing flights. For the traffic volume, as we know, the air taxi within the urban area is the most of traffic demand. That's why we are doing the certification for EH216, this type of model. Now we have completed all the configuration design and internal testing for the VT-30.

(翻譯)實際上，我們在過去幾年的認證過程中一直在進行VT-30的研發工作。我們已經進行了一些內部測試飛行。從交通量來看，我們知道，市區內的空中計程車是交通需求最多的。這就是我們對EH216這種型號進行認證的原因。現在我們已經完成了VT-30的全部配置設計和內部測試。

In this year, we will put more efforts into the testing for the VT-30, and we will release more videos about the flights. Actually, the VT-30 will do a lot of practical flights. Our CEO personally has taken a flight within VT-30. It's a very stable flight experience. Later, we will release our CEO's flight video with the VT-30 and we will submit the TC application for VT-30 within this year.

今年我們會更努力的進行VT-30的測試，也會發布更多的飛行影片。實際上，VT-30 將進行大量實際飛行。我們的執行長親自乘坐過 VT-30 內的飛行。這是一次非常穩定的飛行體驗。隨後，我們將發布我們CEO駕駛VT-30的飛行視頻，並在今年內提交VT-30的TC申請。

The EH216 and the VT-30 almost cover all the application scenarios for the urban air mobility. That is why these two models are our main products. We have accumulated the most flight data for EH216 and soon we will release more updates and progress for the VT-30. Thank you.

EH216和VT-30幾乎涵蓋了城市空中交通的所有應用場景。這就是為什麼這兩種型號是我們的主要產品。我們已經累積了 EH216 的最多飛行數據，很快我們將發布 VT-30 的更多更新和進展。謝謝。

Okay. Thank you so much for the color. My second question is about -- as you mentioned, you recently reached a cooperation agreement with the GAC Group. Could you give more details about this? How does it work? Will you share the R&D or manufacturing collectively? What kind of support will you provide to each other?

好的。非常感謝你提供的顏色。我的第二個問題是──正如你所說，你們最近與廣汽集團達成了合作協議。能否介紹有關情況？它是如何運作的？你們會共同參與研發或製造嗎？你們會給彼此什麼樣的支持？

(interpreted) There was a strong favorable policy and trend in China about the low-altitude economy. Under this background, a lot of governments are working with us. It's our pleasure to work with some state-owned enterprises, such as the GAC Group.

(翻譯) 中國對低空經濟的利多政策和趨勢強勁。在這種背景下，許多政府正在與我們合作。我們很高興能與廣汽集團等一些國有企業合作。

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

人們首先想到的就是我們的合作，主要是關於製作。其實另一方面，我們也將幫助廣汽集團開發他們的飛行出租車產品。

Now we have selected a production site within Guangzhou under our cooperation with GAC Group and we are going to establish autonomous production line with GAC. Through our collaboration, we will continue to improve the product quality of our eVTOL product and to ensure the safety of our eVTOL flights. Okay. Thank you.

現在我們已經在與廣汽集團的合作中，在廣州選定了生產基地，並將與廣汽集團共同建立自主生產線。透過合作，我們將繼續提高我們的 eVTOL 產品品質並確保我們的 eVTOL 飛行的安全。好的。謝謝。

Okay. Thank you so much.

好的。太感謝了。

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

謝謝。由於時間有限，請允許我把電話轉回給安妮女士，請她作結束語。

Okay. Thank you, operator. Thank you all for participating on today's call. If you have any further questions, please contact our IR firm by email or participating or following investor events through the calendar information provided on our IR website. We appreciate your interest and look forward to our next earnings call. Thank you.

好的。謝謝您，接線生。感謝大家參加今天的電話會議。如果您還有任何其他問題，請透過電子郵件聯絡我們的 IR 公司，或透過我們的 IR 網站上提供的日曆資訊參與或關注投資者活動。感謝您的關注，我們期待下次財報電話會議。謝謝。

This concludes today's conference call. Thank you for participating. You may now disconnect.

今天的電話會議到此結束。感謝您的參與。您現在可以斷開連線。

Portions of this transcript that are marked (interpreted) were spoken by an interpreter present on the live call. The interpreter was provided by the company sponsoring this event.

本記錄中標記（翻譯）的部分是由現場通話中的翻譯人員說的。翻譯由贊助此活動的公司提供。