Q3 2023 EHang Holdings Ltd Earnings Call

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Speaker 1: It's a ladies and gentlemen, thank you for standing by and welcome to the third quarter 2023 earnings conference call as a reminder, we are recording.

Good day, ladies and gentlemen, and thank you for standing by and welcome to the third.

Third quarter 2020 free earnings conference call.

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

Speaker 1: Now I will turn the call over to Angie Ehang, Senior Director of Investor Relations.

Now I will turn the call over to <unk> senior director of Investor Relations.

Mr. <unk>. Please proceed.

Speaker 2: Hello everyone, thank you for joining us on today's conference call to discuss the company's financial results for the third quarter of 2023. The earnings release is available on the company's IR website.

Hello, everyone and thank you for joining us on today's conference call to discuss the company's financial results for the third quarter of 2023.

Earnings release is available on the company's IR website.

Speaker 2: Please note that the conference call is being recorded and the audio replay will be posted on the company's website.

Please note. This conference call is being recorded and the audio replay will be posted on the company's IR website.

Speaker 2: On the call today, we have Mr. Huan Zhihu, our Founder, Chairman, and Chief Executive Officer. Mr. Xin Fang, Chief Operating Officer. Mr. Connor Yang, Chief Financial Officer and the Director of the Board.

On our call today, we have Mr. <unk> Hu, our founder Chairman and Chief Executive Officer, Mr. Shang Fang Chief operating officer, Mr. Conor Yang Chief Financial Officer, and a director of the board.

Speaker 2: The management team will successfully give prepared remarks. Remarks delivered in Chinese will be followed by English translations.

The management team will successfully keep prepared remarks remarks should delivery in Chinese will be followed by English translations oleds.

Speaker 2: All translation is for the convenience purpose only. In case of any discrepancy, management statement in the original language will prevail. A Q&A session will follow.

All translation is for convenience purposes, only in case of any discrepancy management statement in a rational language well profile.

Q&A session will follow afterwards.

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 90 95.

Speaker 2: forward-looking statements involving inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today.

Forward looking statements in Bobby current risks and uncertainties as such the company's actual results may be materially different from the expectations expressed today.

Speaker 2: Further information regarding these and other risks and certainties is included in the company's public filings with the SEC.

Information regarding these and other risks and uncertainties is included in the company's public filings with SEC.

Speaker 2: The company does not assume any obligation to update any forward-looking statement except as required under applicable law. Also, please note that all numbers presented are in R&B and up for the third quarter of 2023, and as stated as was.

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 present data only RMB and therefore, the third quarter of 2023.

As stated as wash.

Speaker 2: With that, let me now turn the call over to our CEO , Mr. Hua Zhihu. Please go ahead, Mr. Hu.

With that let me now turn the call over to our CEO. Mr. <unk>. Please go ahead Mr. Hu.

Speaker 3: Thank you, Annie. Hello, everyone. Thank you for attending our telephone conference, the third quarter of 2023.

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Speaker 3: We have finally realized the most anticipated and exciting important milestone in Yihang's development history.

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Speaker 3: It is the EH216-S, a self-developed product of Yihang, the unmanned aerial vehicle system, which was approved by the Chinese Civil Aviation Administration on October 13, 2023. This is the world's first unmanned aerial vehicle with an electric vertical take-off and landing. It is not just a simplified version of Yihang.

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Speaker 3: He guided the entire e-vehicle industry in the direction of moving forward and paved the way for the development of the industry. As the saying goes,

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Speaker 3: The establishment and development of a new industry requires bottom-up innovation and a persistent commitment to development.

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Speaker 3: This is the determination of us Yihang people, never forget our original intention and never give up.

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Speaker 3: We finally finished the whole process from 0 to 1.

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Speaker 3: such as all-electric, unmanned, all-segment, group transfer, etc. Therefore, compared to traditional unmanned aircraft, there is a huge difference in technical structure, configuration, performance, function, operation mode, and flight environment.

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Speaker 3: For this reason, the Chinese Civil Aviation Bureau has organized top experts in the country and established an expert team of nearly 100 people. The first-line intelligent team cooperates closely with the Chinese Civil Aviation Bureau's audit team, is innovative and rigorous, and strives for correctness. The principle of safety first above life is the same level of safety as that of someone driving an aircraft.

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Speaker 3: and laid the groundwork for the EH216-S. It contributed to the development of the international civil aviation electric unmanned aerial vehicle carrier aircraft and the establishment of a sound test flight standard, contributing to China's wisdom and China's plan.

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Speaker 3: The process of test-flight auditing is impeccable. We and the Chinese Civil Aviation Administration based on the framework of CCAR-21 based on the scientific, comprehensive, and safe principle. Based on the strict procedure of test-flight auditing multi-dimensional, multi-professional, comprehensive, and systematic we have successfully completed a large number of difficult and complicated audit and verification work.

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Speaker 3: All the work is divided into flight performance, structure, design and structure, electrical system, power equipment, flight control system, ground control system, communication and routing, human-machine interaction, and overall control.

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Speaker 3: system environment, software simulation, data chain, ground control station,????,????, flight performance, and super-stable features, and other experiments.

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Speaker 3: It includes experiments on components, equipment, and integrity, preemptive defects, malfunctions, and interference during test flights, etc.

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Speaker 3: More than 1,500 test flights and more than 40,000 safety flight data records have been completed in accordance with all the terms of the compliance review, with scientific, rigorous and authoritative. Obtaining TC means EH26-S has the right to engage in unmanned transport and commercial operation. It also indicates that in the days to come, the industry is about to enter a new stage, leading to commercial operation.

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Speaker 3: I would like to take this opportunity to thank all the E-Hang employees, the leaders of the Chinese Civil Aviation Bureau, the staff, and the audit team. I would also like to thank all the friends who support E-Hang and the development of the eVTOL industry. But I am well aware that obtaining TC does not mean that E-Hang has been successful. This is just another new beginning for us.

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Speaker 3: But this has already opened the door to the rapid development of the unmanned aerial vehicle industry and opened the door to the low-flight industry.

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Speaker 3: leading China's urban and aviation industry into the fast lane.

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Speaker 3: As pioneers in the industry, there will be many firsts waiting for us to gradually realize.

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Speaker 3: For example, the first EH216-S based on TC production is now off the market. Please look forward to the first batch of EH216-S's open operating points and lines, the first commercial flight, and the first passenger purchase.

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Speaker 3: Of course, the aviation industry needs to remember flight safety all the time.

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Speaker 3: In the past few years, we have carried out more than 42,000 unmanned aerial flights in 14 countries around the world.

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Speaker 3: In the new phase of commercialization, we set a new goal for ourselves.

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Speaker 3: is to continue to maintain safe flight and pave the way for the health development of the industry. At the production end, we will strictly control the quality standards of the aircraft. On the basis of obtaining the AS9100D international aviation and aerospace quality system certification, we are currently working closely with the Chinese Civil Aviation Bureau to complete the management work of the production license PC.

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Speaker 3: to ensure that each aircraft product produced in batches meets the test flight standards, passes the test flight certificate AC, and can be delivered to customers efficiently.

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Speaker 3: In terms of operation, we are actively promoting the commercial operation of EH216-S and preparing for it, including improving the safety operating regulations, training personnel, starting platform construction, maintenance and service system, and operational qualifications.

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Speaker 3: It is also an important guarantee for the safety and management of E-Vito, a one-way, unmanned vehicle.

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Speaker 3: In the commercial operation stage, Yi Hang's attitude towards public safety and industry development is reasonable.

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Speaker 3: In the early stage, we proposed the use and operation restrictions for EH-216-S. First, we launched passenger tourism, short-haul flight services, etc.

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Speaker 3: to gradually expand the application of automated urban air traffic, such as airport deceleration and fully automated urban air traffic, in a stable and orderly way.

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Speaker 3: In this process, the airline will continue to improve product proposals, continue to promote basic research and development, complete test flights of high-energy density batteries, complete test flights and test flights of vertical take-off and landing units such as VT30 and Evato aircraft, and improve flight performance.

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Speaker 3: That is why we hold to the core priorities that they have highlighted, and safeguard the security, autonomy and environmental protection of air traffic, which is the key goal that has been in the back of our minds for many years.

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Speaker 2: Hello everyone, thank you all for joining our conference call today.

Hello, everyone and thank you all for joining our conference call today.

Speaker 2: The third quarter of 2023 marks a significant milestone in our journey, as we have successfully reached one of the most highly anticipated and thrilling achievements.

The third quarter of 2010, three marks a significant milestone in our journey as we have successfully reached one of the most highly anticipated and assuming achievement.

Speaker 2: Our self-developed EHOME 216S passenger car in air and airway vehicle system has obtained a type certificate from the CAC on October 13th this year.

South <unk> success passenger carrying unmanned aerial vehicle system has obtained a type certificate from the CEC October 19th this year.

Speaker 2: making it the world's first TC for an MLE-vital aircraft.

Making it the worst firstly TCE for Andy VTOL aircrafts.

Speaker 2: It is not only a milestone for Ehang, but also serves as a guiding light for the entire e-vehicle industry, paving the way for its future development.

It is not only a milestone for <unk>, but it also serves as a guiding light for the entire you made of industry paving the way for these future development.

Speaker 2: As the saying goes, being the pioneer in a new industry is no easy feat. It requires innovation from the ground up and unwavering determination from the outside.

At the same dose being the pioneer in the new industry is no easy feat.

Why is the innovation from the ground up.

We've re determination from the asset.

Speaker 2: At Yihang, we have always been committed to this principle, to keep in mind our humble beginnings and never give up.

Eddie Heng, we have.

<unk> always been committed to this principle to keep in mind, our humble beginnings and it never came up.

Speaker 2: In the early days, when there were no established methods for evidential airworthiness education worldwide, we embarked on a journey of continuous exploration, experiment, and improvement.

In the early days when there were no established no matter, where you may know and what's nice indication worldwide.

We embarked on a journey of continuous exploration experiment any improvement.

Speaker 2: It was in January 2021 that the CAC officially accepted our TC application for the EHOME 216S.

And it was in January 'twenty. When you won that at CEC officially accepted our TCE application, whether you had to 16 S.

Speaker 2: After that, over more than 1000 days and nights, we persevered with relentless effort, overcoming challenges and demonstrating innovation.

After that.

Over more than 1000, Jason nights, what persevered with relentless effort overcoming challenges and are demonstrating innovation.

Speaker 2: we also face additional hurdles posed by the epidemic.

We also faced an additional hurdles posted by the epidemic.

Speaker 2: Today, we have successfully completed the entire process of TC certification, starting from scratch, leading the way for M&A vitro type certification.

Today, we have successfully completed the entire process of TC certification starting from scratch, leading the way for and then David Hall type certification.

Speaker 2: D116S stands out as a disruptive and innovative product, boasting a range of unique features such as its all-electric nature, autonomous flying, fully-backup systems, and cluster management, among others.

<unk> hundred 16 S stands out as a disruptive.

Any kid product boasting a range of unique features such as is all electric nature Autonomous line fully backup systems and a question management among others.

Speaker 2: As a result, it differs significantly from traditional piloted aircraft in terms of technical architecture, configuration, performance, functionality, operation modes, and flight environment.

As a result, and it differs significantly from traditional piloted aircraft in terms of technical architecture configuration performance functionality.

<unk> loans and a flat environment.

Speaker 2: Recognizing this, the CAC gathers a team of nearly 100 top experts from across the nation to review and certify EHOME 216S.

Recognizing this disease at Gunderson, a team of nearly 100 top experts from across the nation to review and to certify <unk> to our success.

Speaker 2: Through close collaboration between the Yihang team and the CAC review team, a rigorous and innovative approach was taken and established the world's first airworthiness certification standard for passenger-carrying UAVs.

Through close collaboration between <unk> and NSE renewed team.

<unk> innovative approach was taken.

And established a worst first airworthiness certification standard for passenger carrying Uavs.

Speaker 2: guided by the principles of life first, safety first. This standard ensures that the EN216S certifies at the level of safety equivalent to that of a piloted aircraft.

Guided by the principles of a life first safety first the standard issuers Daddy hand to Asics as certified at a level of safety equivalent to that album piloted aircraft.

Speaker 2: These standards lay a solid foundation for the verification of the EN216s, contributing Chinese wisdom and solutions to the global development of the electric passenger-carrying UAVs in a civil aviation, and the establishment of a comprehensive airworthiness certification standard.

Dave tenders leaves us solid foundation for the verification Alejandro Asics S contributing Chinese wisdom managed solutions to the global development update you actually could passenger carrying uavs in a civil aviation.

And the establishment of the comprehensive Wozny certification standards.

Speaker 2: The process of airworthiness certification is a rigorous one with no shortcuts.

The process works.

Certification is a legal response with no shortcuts.

Speaker 2: grounded in the principles of science, comprehensiveness, and safety, and following the framework of CCAR21. We, in collaboration with the CAC, have undertaken an extensive and complex review and verification process.

Grounded in principles or the size comprehensive Nathan safety and a following in a framework of a CCA or 'twenty one.

We in collaboration leased or CEC undertaken extensive and complex review any verification process.

Speaker 2: This comprehensive approach encompasses multiple dimensions and disciplines, ensuring a meticulous and systematic evaluation.

This can prehensile approaching encompass has multiple dimensions and the disciplines, ensuring a meticulous and systematic evaluation.

Speaker 2: Across the 12 professional subjects and 65 major categories, we have completed over 450 compliance test items.

Across the 12 professional subject and 65 major categories. We have completed over 450 compliance test items.

Speaker 2: The 12 professional subjects cover a wide range of areas, including flight performance, structure, design and configuration, electrical system, propulsion unit, flight control system, ground control station, communication and data link, airborne human-computer interaction, general aspect, continued airworthiness, and system safety.

12 professional subject cover a wide range of areas, including slide performance structure.

I had a configuration.

Circle system propulsion unit flight control systems ground control station Communications and data link Camborne human computer interaction General respect continue to air Worthiness and system safety.

Speaker 2: The compliance test involving assessing main material performance, structure strength, flame resistance, crashworthiness, gas toxicity, environmental conditions of equipment and systems, software simulation, data links, ground control station, overall system functionality, electromagnetic compatibility, flight performance, flight stability characteristics, etc.

The compliance test involving assessing men material performance structure stress flame resistance crush witness gas toxicity environmental conditions have a permanent and systems software simulation data links ground control station overall system functionality.

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Traumatic compatibility flat performance and the slightest stability characteristics et cetera.

Speaker 2: Throughout the validation process, we meticulously scrutinized every component, equipment, and the entire aircraft for any potential defects, faults, or interference.

Throughout their validation process will meticulously scrutinized every component equipment and an entire aircraft for any potential defects thoughts or interference.

Speaker 2: This scrutiny extended to both laboratory tests and flight tests.

This scrutiny extended to both laboratory tests and flight test.

Speaker 2: Over 1,500 compliance test flights, along with more than 40,000 safe flight records, EHOME 216S finally met all the requirements to complete the compliance review. The TC process has been conducted with a scientific rigor and authoritative oversight. The TC signifies that EHOME 216S is qualified for passenger carrying commercial operations.

Over 1500, <unk> test rides, along with more than 40000 safeguard record to.

One six as finally met all the requirement to compete it sometimes could be DTC process has been conducted with our scientific weaker.

<unk> oversight the TC signifies that <unk> success is quantified for passenger carrying commercial operations.

Speaker 2: It also marks the beginning of a new chapter, as we are poised to take the lead in commercial operations in the days to come.

It also marks the beginning of the new chapter as we are poised to take the leading commercial operations in the days to come.

Speaker 2: I want to thank the entire team at Ehang, as well as all the leaders and members of the CAC and the review team for their support and dedicated efforts.

One of them the entire team at <unk> as far as older leaders and members of the CEC and the renewed team for their support and the dedicated efforts.

Speaker 2: and to all the people who support and are passionate about our development as well as the veto industry.

And to all the people who support and are passionate about our development as far as David in the industry.

Speaker 2: However, we are fully aware that obtaining TC does not mean we have succeeded. Instead, it just makes the beginning of a new chapter for us.

However, we are fully aware that obtaining D. C does that mean, we have succeeded instead it Justin next the beginning of a new chapter for us.

Speaker 2: The DC has opened the door to rapid advancement in the inland aviation industry and the vast opportunities presented by the low-altitude economy.

D. C has opened the door to rapid advancement in it and then aviation industry and <unk>.

Vast opportunities present data at a low altitude economy.

Speaker 2: It will propel China's urban air mobility industry into the faster lane.

It will propel China's urban air mobility industry into the fast Lane.

Speaker 2: As a pioneer in this field, we anticipated several firsts that await us to achieve on this journey.

As a pioneer in this field, we anticipated several first that a weight has to achieve on this journey.

Speaker 2: This included milestones such as the first E-216S aircraft produced according to the TC, officially rolling off the production line, and the first batch of E-216S operation sites on the route.

This included milestones such as diversity onto our success aircraft produced according to the TC officially enrolling up to a production line and a first a badge heavy into Asics S operation sites and new routes.

Speaker 2: the first commercial flight, and the first passenger to buy a flight ticket.

The first commercial flight and the first to passenger to buyer flight ticket.

Speaker 2: We invite you to stay tuned and witness these milestones as we progress forward.

When you might you to stay tuned and witnessed this now astellas as we progress forward.

Speaker 2: Undoubtedly, prioritizing flight safety is of paramount importance in the aviation industry, as it directly impacts the personal safety of every passenger.

And Al Kelly prioritizing flight safety is of Paramount importance in aviation industry.

To directly impact the personal safety of Andrew passenger.

Speaker 2: Throughout the past few years, we have conducted over 42,000 autonomous flights across 14 countries, establishing an outstanding track record.

The past few years, we have conducted over 42000 ton on the slides across 14 countries.

Publishing an outstanding checkpoint record.

Speaker 2: As we enter a new phase of commercial operations, we will continue to uphold our commitment to safe flights for a healthy and sustainable development of this industry. At the production level, we maintain strict control over the quality standards of our aircraft.

As we enter a new phase of our commercial operations, we will continue to uphold our commitment to safe flights for a healthy and sustainable development of this industry and the production.

Production level, we maintain strict control over the quality standards of our aircraft.

Speaker 2: Based on obtaining the AS-900D International Aerospace and Aviation Quality Management System certification, we are now actively collaborating with the CAC to finalize the processing of a production certificate. This ensures that every aircraft producing mass quantities adheres to the airworthiness standards and will be issued an airworthiness certificate and efficiently delivered to our customers.

Just on obtaining S. Noah hindered D International Aerospace and aviation quality management system certification. We are now actively cooperating with the CEC to finalize the processing of a protection to vacate this ensures that every aircraft prettiest in mass quantities adheres to the air Wisconsin.

And we'll be issue and it wasn't certificate and efficiently delivered to our customers.

Speaker 2: Regarding operations, we are advancing toward commercial operations of EHOME 216S in an orderly manner.

Regarding operations, we are advancing toward a commercial operations of 826 S in an orderly manner.

Speaker 2: we are undertaking comprehensive preparations, such as enhancing safety operation regulations, conducting personnel training, constructing vertiports, establishing maintenance and service systems, and obtaining operation licenses and insurance. Furthermore, in August of this year, our airman aircraft cloud system received approval for trial operations from the CAC.

And you are taking comprehensive preparations such as enhancing safety operation regulations conducting personnel training constructing very reports istar.

Appalachia maintenance and the service systems, and obtaining operational licenses and insurance for.

Furthermore, in August of this year, our <unk> aircraft to cloud system received the approval for trial patients from the CEC.

Speaker 2: which serves as a significant foundation for our upcoming commercial operations.

Which serves a significant foundation for our upcoming commercial operations.

Speaker 2: It also plays a vital role in ensuring the safety and management of large-scale operations of our unmanned evaded aircraft.

It also plays a vital role in ensuring the safety and management of large scale operations, our M and E Bay two aircrafts.

Speaker 2: At the commercial operation stage, we will take a proper pace and approach of our development with a responsible mindset.

And the commercial operation stage, well, they would take a proper pace and approach of ours enrollment with a responsible mindset by.

Speaker 2: by prioritising public safety and fostering industry development.

By prioritizing the public safety and in fostering interest rate environment.

Speaker 2: Initially, we have set restrictions on the usage and operational conditions of eHunt 2SX as

Initially we have set restrictions on the usage and the operational conditions hobby onto Asics as.

Speaker 2: primarily focusing on sightseeing and short-distance passenger flights.

Primarily focusing on sizing and short distance passenger that.

Speaker 2: Adhering to the principle of progressive risks and conducting trial operations while advancing certification, we plan to gradually lift restrictions, expanding operation scenarios into the broader range of urban mobility applications, including airport shuttles and fully autonomous urban air taxis, etc.

Adhering to the principle of a progressive risks and have conducted trial operation while advancing certification.

We plan to gradually lifted restrictions extending operations narrows into a broader range of urban mobility applications, including airports Shadows and fully autonomous urban their taxes et cetera.

Speaker 2: Throughout this process, EHOME remains dedicated to enhancing our product, advancing fundamental research and development, and achieving milestones such as the test flights with high-energy density batteries, and test flight our lift and cruise evitals such as the VT-30 alongside its airworthiness certification.

Throughout this process.

We remain dedicated to enhancing our product advancing fundamental research and development and achieving milestones such as the test flights with high energy density batteries and test flight hour lease increase ebay those such has to be <unk> 30, alongside <unk> and worsening of vacation.

Speaker 2: These efforts will be geared towards achieving significant advancement in our flight performance.

These efforts will be geared towards achieving significant advancement in our flight performance too.

Speaker 2: To achieve safe, autonomous, and eco-friendly mobility is not only a longstanding commitment for Yihang, but also a shared goal for humankind.

To achieve safe economists and eco friendly and mobility. It is not only a long standing commitment for <unk>, but also a share of the golfo humankind.

Speaker 2: Facing a long journey ahead, we are aware of the significant responsibilities and the mission as a pioneer of innovations. Our dedication

Facing a long journey ahead, we are aware of the significant responsibilities and the nation as a pioneer of our innovations.

Our dedication remains unwavering.

Speaker 2: guided by the core principles of the Chinese civil aviation industry, a reverence for life, regulations, and duties. We are resolute in our pursuit of strategic goals, unwaveringly contributing towards the high-quality development of the civil and manned aviation industry, thereby making meaningful progress in advancing this innovative sector.

Aided by the core principles of the Chinese civil aviation industry.

Our revere is for life regulations and duties, we are resolute in our pursuit of our strategic goals.

And they are contributing towards a high quality development of the civil and then aviation industry.

By making meaningful progress in advancing this innovative sector.

Speaker 2: Now, I will hand over the call to our Chief Operating Officer, Mr. Xin Fang. Thank you.

Now I will hand over the call to our Chief operating officer Mr. CFO. Thank you.

Speaker 4: Thank you, Mr. Fu. Hello, everyone. In October of this year, Yihang successfully verified the 216-S. It indicates that Yihang has officially entered the next stage of commercial operation from the stage of product certification. In line with the strategic positioning of our urban public transportation platform operators, the company will adopt a comprehensive commercial strategy of product sales plus operating services and commercial driving.

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Speaker 4: Next, I will share the company's latest progress and plans in these three areas.

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Speaker 4: In terms of sales, in the third quarter of this year, we have sold 13 Yihang 216 series cars in a row.

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Speaker 4: For example, we have received 100 orders from Shenzhen Bolin customers, one line of 216-S, one purchase order, and handed over the first five to the customer for preliminary operation preparation.

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Speaker 4: In addition, we have a strong cooperation with the Feicheng government, and we hope to promote more than 100 products in line with the ER6 series.

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Speaker 4: As of now, there are more than 200 orders of EHA 26 series products in China.

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Speaker 4: In the future, we will gradually switch according to customer needs.

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Speaker 4: In terms of production, we are steadily advancing production work under the leadership of the China Civil Aviation South China Region Management Bureau. We are steadily advancing production work under the leadership of the China Civil Aviation South China Region Management Bureau.

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Speaker 4: The first batch of E-Hang 216-S will be produced and delivered to customers in the fourth quarter of this year.

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Speaker 4: In terms of operations, urban air traffic, ecological infrastructure and new industry long-term development are inseparable from the government's top-level regulations and policies.

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Speaker 4: We are very happy to see that the four departments of the Ministry of Industry, Technology, Finance, and Civil Aviation have jointly issued the Green Aircraft Manufacturing Development Protocol for 2023-2035. It is proposed to achieve four points in 2025.

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Speaker 4: Recently, the domestic governments have also launched a series of support policies to actively promote the high-quality and healthy development of the low-carbon economic industry.

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Speaker 4: As China's unmanned aerial vehicle has established a solid policy base in China, since the third quarter, we have signed a strategic cooperation agreement with the government of Shenzhen Security Area and the government of Hefei City.

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Speaker 4: We will support the development of industry and applications in many areas, such as policy, infrastructure, applications, funding subsidies, etc.

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Speaker 4: As a real gatekeeper, the police have been planning to launch more than 100 low-altitude aircraft before 2025, as a transportation hub in the Bay Area.

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Speaker 4: to form the country's leading low-cost economy innovation and development benchmark program.

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Speaker 4: The security area is speeding up the construction of the city's air traffic control system in Banle Port Bay Area.

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Speaker 4: Ready for the next flight, 216-S, a local open-air tourism experience.

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Speaker 4: Hefei City as the center of low-altitude air management reforms in Anhui Province and the regional headquarters of general aviation

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Speaker 4: China is actively building low-cost industrial clusters. The government of Hefei plans to provide the bank with a total value of $100 million in purchase orders and funding.

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Speaker 4: and actively promote the use of unmanned aerial vehicles in low-altitude home scenes such as local cultural tourism, emergency logistics, firefighting, etc.

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Speaker 4: We will also develop a long-term operation of unmanned aerial vehicles in the central park of Luogang, Hefei.

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Speaker 4: As for the license plate number issued by the Chinese Civil Aviation Bureau, we are currently communicating with local customers and partners.

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Speaker 4: his personal safety and the safety of civilians.

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Speaker 4: to pave the way for the next generation of overseas orders and business landings.

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Speaker 2: ???????????Kona ?????? ???? This is the English translation of Mr. Fang's remarks.

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This is the English translation, Mr. Fones remarks. Thank.

Speaker 2: Thank you, Mr. Hu, and hello, everyone. The achievement of the EHAN 216STC in October this year makes EHAN's transition from the product certification phase to the next stage of commercial operation.

Thank you, Mr Hu and Hello, everyone.

Men choppy Hunter 16 S. T C. In October this year makes a transition from the protector certification phase to the next stage of our commercial operations.

Speaker 2: aligned with our strategic positioning as an urban mobility platform operator. The company is set to implement an integrated business model, driven by both product sales and operational services.

Aligned with our strategic positioning as an urban air mobility platform operator.

The company is set to implement an integrated business model driven by both product sales and operational services.

Speaker 2: Therefore, production, sales, and operations are the three key drivers to our business growth. I will now share the latest updates and plans of our company in these three areas.

Therefore production sales and operations are the three key drivers to our business grows I will now share the latest updates and potential of our company in these three areas.

Speaker 2: Regarding sales, we successfully delivered 13 units of 816 series products in the third quarter, marking a notable year-over-year and quarter-over-quarter growth.

Regarding cells were successfully delivered a 13 unit to me and to 16 series product in the third quarter.

Martin a notable year over year and quarter over quarter growth.

Speaker 2: With the EHON 216S receiving its TC, we've seen a significant increase in business collaborations and product purchase demand from customers around the globe, especially in China.

With the Hunter 16 S receiving T. T. What are you seeing a significant increase in business collaborations and product purchase demand from our customers around the globe.

Especially from China.

Speaker 2: For instance, Shenzhen Bolin intends to purchase 100 units of E-116S and we have delivered the initial 5 units for operational preparations.

For instance, Shenzhen boiling intends to purchase 100 units have a hand to our success and we have delivered the initial five units for operational preparations.

Speaker 2: Moreover, in accordance with our strategic partnership, the Hefei Municipal Government is set to facilitate orders for at least 100 units of EN216 series products.

Moreover, in accordance with our strategic partnership the Hefei Municipal government is set to facilitate orders for at least a 100 units and we had 206 series product.

Speaker 2: As of now, the total sales pipeline for the E-116 series in China have more than 245 units, which will be delivered in phases as per customers' requirements.

I have now the total sales pipeline for that he had to say since here is in China has more than 245 units, which will be delivered in phases.

Customers' requirements.

Speaker 2: Regarding production, guided by the CAC Central and Southern Regional Administration, we are steadily moving towards producing EHAM216S according to its TC at our InfoFactory.

Regarding production guided by the CRC central and southern regional Undiminished ration were steadily moving towards producing you have two asics as according to its T C at our factory.

Speaker 2: The initial batch of B116S produced based on ECTC is scheduled to roll out of our production line for deliveries to our customers in the fourth quarter of 2023.

The initial batch Ob handler success courteous debate filing for T. V is scheduled to roll off our production line for deliveries to our customers and of course quarter on 2023.

Speaker 2: In terms of operations, the growth and sustained development of the UEM ecosystem and emerging industries hinge on strategic government planning and policies.

In terms of operations, the gross and the sustained development of the OEM ecosystem and emerging industries hangchow strategic government, depending on our policies.

Speaker 2: We are glad to see that just before the Hantou-16S obtains TC, China issued the Green Aviation Manufacturing Industry Development Outline 2023-2035, jointly by the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance and the CAC, to encourage evasive operations by 2025.

We're glad to see that just before the Hunter 16 S obtains T C.

China issued a green aviation manufacturing industry development outline.

23 to 2035 jointly.

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Speaker 2: Moreover, recently, many local governments in China have introduced a series of supportive policies to cultivate robust and sustainable growth in the low-altitude economy.

Moreover, recently, many local governments in China have introduced a series of a supportive of policies to cultivate a robust and sustainable growth in the low altitude economy.

Speaker 2: establishing a stable policy foundation for our UAV operations in China.

Establishing a stable policy foundation for UAV operations in China.

Speaker 2: Since the third quarter, we have entered strategic partnerships with Bao'an District Government of Shenzhen and Hefei Municipal Government.

Since the third quarter, we have an internal strategic partnerships with Bolland district government of Shenzhen and a healthy municipal government.

Speaker 2: These governmental collaborations involve providing support in terms of policies, infrastructures, applications and subsidies to Yihang, aimed at facilitating industrial growth and applications within this region.

These governmental collaborations involve providing support in terms of our policies infrastructures applications under subsidized to ehow aimed to address the sudden UK industrial growth and applications within this region.

Having a stringent gateway and a key transit happy in the Greater Bay area. Bowen District aims to became a pioneer in zone for low altitude economy innovation and the development in China.

Speaker 2: and it plans to build over 100 low-altitude aircraft vertiports along with the launch of more than 50 UAV routes by 2025.

Any plans to build over 100 low altitude aircraft already parts along with the launch of our more than 50 UAV routes by 2025.

Speaker 2: Currently, in strategic partnership with Yihang, Baoyuan is actively expediting its establishment of a UAM Operation Demonstration Center at the Old Age Bay with the plan to initiate aero-tourism and the local sightseeing services with Yihang-216S.

Constantly and strategic partnership with the home balance actively ex beating is establishment of a UE admob patient demonstration center at the O H Bay with a plan to initiate ore tourism and the local sightseeing services, we see hand to Essex S. Coughing.

Speaker 2: Hefei City, serving as the central area for low-altitude airspace management reform in Anhui Province.

Okay City, serving as a central area for low altitude airspace announcements reform yeah, we potties.

Speaker 2: and as the regional general aviation service hub, is actively fostering the development of the low-altitude industry cluster.

And asked our regional General Aviation service hub is actively fostering the development of the low altitude industry cluster.

Speaker 2: The Hefei municipal government intends to provide Yihan with a total value of 100 million U.S. dollars support.

The whole thing municipal government intends to provide he hung with a total value of about 100 million U S dollars imports.

Speaker 2: including facilitating purchase orders and financing support.

Including facilitating purchase orders and our financing support.

Speaker 2: Additionally, Hefei is dedicated to promote the utilization of our UAVs across various low-altitude scenarios, including culture and tourism, emergency transportation, air logistics, and firefighting, etc.

Additionally, <unk> is dedicated to promote the utilization of our uavs across various low altitude of scenarios, including how China tourism emergency transportation Air logistics and firefighting, etc.

Speaker 2: Meanwhile, we will plan to launch regular operations with our AVVs in Luogang Central Park in Hefei.

Meanwhile, we will plan to launch regular operations was already released in book on Central Park in coffee.

Speaker 2: Internationally, following by obtaining a TC from the CAC, we are proactively engaging in efforts to secure bilateral recognition and certification from various civil aviation authorities through communication and collaborations with our local customers and partners.

Internationally falling by obtaining a D C from the CEC, we're proactively engaging in efforts to secure a bilateral recommendation and certification from the civil aviation authorities, so their communication and collaboration with our local customers and partners.

Speaker 2: This is our position as well for the next phase of delivering international orders and expanding our business abroad.

This is will position us well for the next phase of it delivery international orders and expanding our business abroad.

Speaker 2: Next, I will turn the call over to our CFO , Connor. Thanks.

Next I will turn the call virtual our CFO Conor thanks.

Speaker 5: Thank you, Mr. Fang. Hello, everyone. This is Connor. Before I go into details, please note that all numbers presented are in R&B and are for the third quarter of 2023. Unless stated otherwise, 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.

Thank you Mr Dong.

Hello, everyone. This is Connor before I go into details. Please note that all numbers presented are in RMB and the airport third quarter of 2023.

Unless stated otherwise detail analysis, all comparable in our earnings press release, which is available although IR web site.

Now highlights about some of the key points here in.

Speaker 5: In third quarter, total revenue was $28.6 million, an increase of 248% from $8.2 million in the same period last year, and 186% increase compared to $10 million in second quarter. The increase were primarily attributed to the increase in our sales volume of EH216 series products.

In third quarter total revenue or $28 6 million, an increase of about 248% from $8 2 million in the third.

Jim Piro last year, and 186% increase compared to 10 million in second quarter. The increase were primarily attributed to the increase in our sales volume of <unk> 216 series products, we deliver living units of ear to one six up 225%.

Speaker 5: We deliver living units of EH216 up 225% year over year, and 160% quarter over quarter.

Year over year, and 160% quarter over quarter.

Speaker 5: We've been seeing growing demand for our products upon obtaining the TC and expect our value further increase and cash flow generation continue to strengthen in the next few quarters.

We have been seeing growing demand for our products.

Pending the PC and expect our value further increase and cash flow generation continued to strengthen in the next few quarters.

Speaker 5: Goods margins continue to stand at a high level of 64.6% in Q3.

Gross margin continue to spin at a high level of 64, 6% in third quarter.

Speaker 5: increase of a 4.4 percentage point from 60.2% in second quarter, primarily driven by higher average selling price of our EH216. Furthermore, our distinctive advantage in the UAM industry allow us to enjoy higher margin over other type of electric transportation vehicles.

An increase of 4.4 percentage point from 62% in second quarter, primarily driven by higher average selling price about 216. Furthermore, our distinctive advantage in the UAE and industry allow us to enjoy higher margin over other type of.

Electric transportation vehicles.

In third quarter, our adjusted operating expenses, which are operating expenses, excluding share based compensation expenses were 54 million down nine 5% from $59 7 million in the same period last year and down 7% from $58 1 million in <unk>.

Speaker 5: This decrease was primarily due to a reduction in professional service fees.

<unk> quarter. This decrease was primarily due to a reduction in professional service fees.

Speaker 5: and healthier situation in the economy of Singapore compared to last year.

And healthier situation in Congress removal compared to last year.

Speaker 5: demonstrating effective cost control and improve operational efficiency.

Australia effective cost control and improve operational efficiency and as a result.

Speaker 5: Our adjusted operating loss in third quarter was $34.2 million, an improvement from a loss of $52.9 million in the same period last year, and a loss of $51.3 million in the second quarter. Adjusted net loss was $31.3 million, a significant reduction of 43.1% year-over-year, and a reduction of 39.5% quarter-over-quarter.

Adjusted operating loss in third quarter was $34 2 million an improvement from a loss of $52 9 million in the same period last year and a loss of $51 3 million as of second quarter. Adjusted net loss was $31 3 million a significant reduction.

<unk> of 43, 1% year over year, and a reduction of 39, 5% quarter over quarter.

Speaker 5: Turning to our balance sheet, our stringent approach to cash and liquidity management is reflected in our cash position. As of the end of the third quarter, we have $295.6 million of cash, cash equivalent, short-term investment, and restricted short-term deposits. In July , we successfully concluded a private placement, securing U.S. $23 million from long-term strategy investors.

Turning to our balance sheet, our stringent approach to cash and liquidity management as reflected in our cash position as of the end of third quarter. We had 295 6 million of cash cash equivalents short term investments and restricted short term deposits and <unk>.

We successfully concluded a private placement securing U S 23 million four long term strategy of investors.

Speaker 5: The funding will bolster our liquidity and provide support for technology advancement, business development, and post-certification commercial operations.

The phone via will bolster our liquidity and provide support for technology advancement.

<unk> development and post certification commercial operations.

Speaker 5: We are confident in our cash position would be sufficient to meet cash needs for us to reach cash flow positive status in the near future.

We are confident in our cash position will be sufficient to meet cash needs for us to reach cash flow positive status in the near future starting from this quarter, we will provide revenue guidance for the next quarter in our earnings results.

Speaker 5: Starting from this quarter, we will provide revenue guidance for the next quarter in our earning results.

We are optimistic about our post PC commercial operations.

Speaker 5: We anticipate achieving revenue of about $56 million for fourth quarter, representing an increase of 257% year-over-year and an increase of 96% quarter-over-quarter. For the fiscal year of 2023, we expect total revenues to be about $118 million, up 166% from last year.

We anticipate achieving revenue of about 56 million for fourth quarter.

Presenting an increase of 257% year over year, and an increase of 96% quarter over quarter for the fiscal year of 2023, we expect total revenues to be about 118 million up 166% from last year.

Speaker 5: Looking forward, as we sell and deliver more products per customer's request and steadily expand our commercial operations in the future, our cash flow will improve and we are confident that the company can generate positive cash flow in later part of 2024.

Looking forward as we sell and deliver more products per customers request and.

Steadily expand our commercial operations in the future our cash flow will improve and we are confident that the company can generate positive cash flow in later part of 2024.

Speaker 5: That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.

That concludes our prepared remarks, let's now open the call for questions. Operator. Please go ahead.

Thank you.

Speaker 1: As a reminder, gentlemen, to ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again.

As a reminder, really that gentlemen to ask a question. Please press star one and one on your telephone and wait for your name to be announced two weeks ago. Your question. Please press star one and one again.

Speaker 1: Once again please press star one and one to ask a question and wait for your name to be announced. To withdraw your question please press star one and one again. Thank you. We are now going to proceed with our first question.

Once again, please press star one and one to ask a question.

And wait for your name to be announced to withdraw your question. Please press star one and one again thank you.

We are now going to proceed with our first question.

Speaker 1: The first questions come from the line of Tim Xiao from Morgan Stanley . Please ask your question. Your line is open.

The first question is coming from the line of Tim.

Now from Morgan Stanley. Please ask your question your line is opened.

Speaker 6: Thank you for taking the question and congratulations on receiving the typed certificate from CAAC. I'm Tim's colleague and will ask the question on behalf of him as he lost his voice due to a bad cold. Just a quick question.

Thank you for taking my question and congratulations on receiving the type certificate from C E O.

A sea change.

<unk> colleague and will ask the question on behalf of him as he lost his voice due to a bad cold.

A quick question about order backlog can we get a sense of the composition of current order backlog in terms of geographic mix and model mix.

Speaker 6: can we get a sense of the composition of current order backlog in terms of geographic mix and model mix?

Speaker 6: When will they be able to contribute to e-house revenue since the company has obtained the title?

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Tycho.

Speaker 5: Yes, thank you for the question. Currently, our self-pipeline reached more than 450 units of unmanned eVTOL aircraft from China and the other part of Asia. This includes more than 245 units from domestic customers and 210 units of pre-orders from Asian overseas markets.

Yeah.

Hi, yes. Thank you for the question currently our self pipeline reached more than 450 units of <unk>.

EBITA aircrafts from China, and the other part of Asia. This includes more than 245 units.

Domestic customer and 210 units.

Preorders on Asia in overseas market.

Speaker 5: There are also other countries from other countries that will be delivered after obtaining validation PC in these respective countries.

There are also other countries from other countries not won't be deliberate after our pending validation D. C. In these respective countries.

Speaker 5: And over 90% of our sales pipeline in the domestic and Asian markets are for EH216-S. And less than 10% orders.

And over 90% of ourself pipeline in the domestic in Asian market.

E etch to one six that you asked.

And less than 10% odors.

Speaker 5: from EH216 Logistic Virgin and also EH216 Firefighter Virgin.

Form edge to one sixth largest divergent and also <unk> 216 <unk>.

Speaker 5: These sales pipeline will be delivered in stages for our customers to request. For instance, our Cenex SPA customers, they typically start with an initial purchase of three to 10 units for training and trial operations and local sites. Subsequently, as operations expand and demand increase, they will buy more products. So this purchase timeline typically spans one to three years.

Firefighter version.

These sales pipeline will be deliberate in stages.

The request.

For instance.

Our <unk> customers. They typically start with an initial purchase of three to 10 units.

Our training and trial operations and locals.

Subsequently at all.

Operation expense and demand increase.

Buy more products.

So these are purchase I might typically spend one to three years.

Speaker 5: So we can see a significant increase in delivery volume in the fourth quarter upon obtaining the TC. Moving forward, we will provide revenue guidance for the next quarter in our quarterly financial reports. Thank you.

So we can see a significant increase in delivery volume in the fourth.

This quarter.

Obtaining the PC moving forward, we will provide revenue guidance on the next quarter No quarterly financial report. Thank you.

Thank you.

Yeah.

Speaker 1: Thank you. We are now going to proceed with our next question.

Thank you we are not going to proceed with our next question.

Speaker 1: And the questions come from the line of Ting Song from Gorman Sachs. Please ask your question. Your line is opened.

And that question comes from the line of Ting Tsung from Goldman Sachs. Please ask your question. Your line is opened.

Thank you for taking my questions.

One oh with Ehealth progress on getting <unk> certification in overseas market like Middle East.

Some other countries. Thank you.

Speaker 7: Okay, let me answer this question. My English poor, I need a translator by any means.

Oh.

What I believe everyone here.

English or I need to translate the buy in.

Okay.

Oh My God.

Speaker 7: The TC we have now is issued by the Chinese Civil Aviation Bureau.

Just a woman walnuts and almonds.

You say so too.

How you doing.

Speaker 7: Okay, the test certificate we have obtained is by the CAC. Yes, as we all know, the Chinese Civil Aviation Bureau has signed a lot of mutual agreements with a lot of companies around the world, I mean, with a lot of civil aviation bureaus, with a lot of national civil aviation bureaus.

That's fine.

Okay.

We have obtained.

E Z go ahead Bob.

Robert Rodriguez of woman isn't that.

Yeah, I'll just add.

It is a tremendous and yet then.

Consensual different locals.

In Colombia it will.

Adam you're on mute using Chengdu is to build on that.

Speaker 7: As we all know, in the past few years, the CAC has reached a lot of bilateral recognition agreements with other aviation authorities in other countries.

The hornsea.

That's well known in the past few years that D. C has.

Our reach a lot of biological reclamation of agreements with other aviation authorities in other countries.

A woman.

They don't want me, how do you think the courtyards agenda.

You know how do you generally put in.

We don't do.

Okay.

And like all of them work.

Speaker 7: We're promoting the communication between the CAC and with other civil aviation authorities. For example, recently the Brazil Civil Aviation Authority have came to China.

Oh, we're promoting that communication.

Between the C D and with other people aviation authorities for example recently the.

Brazil.

People Aviation authority.

Came to China.

So it won't matter, where youll see that go on in June.

The only thing that makes it work out.

We've seen quite a lie.

Susan.

All right.

Speaker 7: So first, we will prioritize to work on the regions that we have orders in the local market. Based on China's TC certification, we have a lot of support from other countries. So I believe that the process will be very fast.

Wendy.

So first of all we'll prioritize the.

To work on the regions that we have our auditors are in the local markets. Okay.

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Using a bounce out of it.

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Okay.

Speaker 2: We believe we will make efforts to promote the VTC procedure, which means the verification of the type certificates in the local countries, and we will provide support to that work.

Okay.

Oh, what leaf will make efforts to promote.

The V P C procedure, which means the verification of the types of vacates in the local countries and Weibo.

Provide the support to that work and a woman <unk>.

Speaker 7: Before the VTC is completed, we can communicate with other countries in advance and conduct training in the local area.

<unk> had a woman.

Great.

So I'm wondering what exactly is it.

He says he who heads up integrate them.

Ah patient.

Speaker 7: Before we obtain the VTC, we can deliver some products to the local market and do some trainings for the local clients. We will start to promote our UAVs and unmanned aerial vehicles to the world as soon as possible. I believe that more countries will see our local landing soon.

Before we obtain the V D C. We can deliver some production to the local market and do some training.

But the local clients.

The assumptions for.

<unk> seen that trend already done.

I will do that.

We're in gastric motility negotiation bundle.

Suddenly come quickly out political and all of them.

Speaker 7: We will extend our market extensions at a proper pace to the international market. We believe that soon we will see our global exposures.

Oh, it will extend our market expansions.

At a proper pace to the international markets, we believe that.

Sure and we will see our.

Local exposures.

Definitely goes into Guatemala.

I'm a quite heavily.

And during the months of that.

Speaker 2: So the VTC is an administrative work. So it's not as complicated as the type certificate. OK, that's my answer. Thank you.

So the BDC is a administrative work so it's not as complicated as the types of aggregate audience without electricity.

That's my answer thank you.

Okay.

Yeah.

Speaker 1: Thank you. We are now going to proceed with our third question.

Thank you we are now going to proceed with our first question.

Speaker 1: The questions come from the line of Rong Zhao from TF. Please ask your question, your line is open.

Two questions come from the line of wrong Zhao from T. F. Please ask your question. Your line is open.

Speaker 8: Okay, thank you for taking my question. So I have two questions on my side. And the first one is about the EH216. So I would like to ask whether the company sees the need to upgrade the product so as to increase the range of mileage, judging from the current feedback from the demand side. And if so, what is the timeline and the cost outlook? And the second question is about the airworthiness certification of the EH216 logistic version. What is the expected time to get PC? Thank you.

Okay. Thank you for taking my question. So I have two questions on my side understood.

<unk> six so I'll, let you ask where the company sits in nature upgraded products, so as to increase their bandwidth knowledge.

Judging from the current feedback from demand side and if so what is the timeline the cost outlook and the second question is about the air Worthiness certification <unk>.

Six logistic equation, what is the expected time to get PC. Thank you.

Speaker 7: Thank you, Mr. Tianfeng. I need Andy to translate. First of all, the 216 model is for public transportation in the city.

Sure.

Nick.

While her Shaw and USAA.

So you're going to devote a woman.

Sure sure.

Is it a woman in.

In Hartford commercial function data.

Speaker 2: Thanks for your questions. C-116S is designed for the short distance air transportation within the city.

Thanks for your question <unk> hundred 16, as design or the short distance.

Air Transportation within the city.

I know a woman.

So I don't know that answer.

Can you say if it wasn't the goal of aging.

Let's go sure Julian has that assumption that Susan IR, Texas genre.

Patients those with Google So it won't.

While monthly.

<unk>.

They are saying you wanted to be quiet and blah blah blah.

How come to auction casual negotiations.

So according to our task.

Our production is capable to do the air taxi services.

Speaker 7: Within the city. So woman, one of them will, another of them will get how UE dollar or MIL should come to another the visions for J? Il. three woman that I'll share dogess with them. one you can contribute the only hold up with interesting constitution, confmponly and about.

Within the city.

So these are all women.

Sure.

One of them, which I get called at Ottawa Mill Shell.

Sure.

The businesses are blue woman.

Sure So Dan Worthington casually.

The only see home health with interest you called too soon.

<unk> also again Bob.

Speaker 2: In order to achieve the longer flight time, we will continue to optimize our power system and batteries.

Oh in hunger.

Yeah.

In order to achieve the longer lifetime, and we will continue to optimize our power system and battery system sale OMA habitual divert those at all.

Speaker 7: As you all know, many companies, especially in China's Ningde era, are developing and launching solid-state batteries. So we have a layout in this area, and as you all know, we also invested in a solid-state battery in the early stage of the project.

Semiannual Johann both traditional backhaul.

And in Russia.

Now lets you go to.

Our goals were.

No.

Yes.

So it could have been shut down.

So they are women that day part.

That drove that change.

Yeah totally.

Yes, the answer to that.

Speaker 2: Yes, as you know that there are many companies in China have invested in the solid-state lithium batteries, for example, the CATL. And recently, we have also invested in a domestic solid-state lithium battery company.

Hello.

Yes.

Thank you.

As you will know that there are many companies in China.

In the solid state lithium batteries for example.

<unk>.

Yeah and recently, we have also invested in a domestic.

Solid state lithium Battery Company Award winner.

Speaker 7: In the future, we will double the performance of the power system and the battery system of the ION6, which I mentioned in the previous speech.

I think as <unk> laid out.

And related to Felicia.

And hopefully now Shimon.

Sunday digital sensor huddle jetblue.

Speaker 7: So we are making efforts to achieve the goal that to double the flight performance in the future. Our goal is to make it fly farther, but we must make it safer.

So are we.

We know we are making efforts to achieve the goal of that.

Sure.

Top line performance.

In the future well minimum will be offered on the Philadelphia.

Okay.

Speaker 2: Our goal is to achieve a longer flight range, but meanwhile, we will ensure safety.

I'll always to achieve our longer range, but Meanwhile, we will ensure safety.

Speaker 7: In addition, between the city and the city, our VT30 has a longer flight time between the city and the city. After the TC certification, we started to let it develop more as soon as possible. In the process of taking TC, our VT30's pace was a little slow.

With that I'll show, you closer to down woman, although it is early and look at the.

Okay.

I'm, Jeff hung fluidity.

Well, let's say that one piece.

They didn't know Joel women's casuals.

Uh huh.

Okay.

David ill woman Matthews a quarter ago.

Ladies and gentlemen, Michael there's Hollywood.

Speaker 7: But we will make it as soon as possible for A330 to enter the process of TCA and we will also let it start to apply for marketing.

One more question.

It gets a little about you say.

Yes.

<unk> Shah.

Speaker 2: During we are doing the type certification with the EHAM 216, the VD30 development pace is much slower, but now we are have after the type certification of EHAM 216, we are also developing and working on the long range model, which is the VD30, a lift and cruise model for the intercity longer range air mobility.

Joining we are doing it perhaps a vacation with the answers 16 there'll be.

30 development pace is a much slower right now we are after.

After the half simplification to Asics, we are also developing and working on the long range model, which is W. E, Turkey, a leaseback whose model.

Interestingly longer range animal Verity.

Speaker 7: The second question is about the logistics version of the 216. We have already approved a request from the Chinese Civil Aviation Bureau.

Hello.

Sure Oliver.

Julio.

<unk> as a woman day.

<unk> will materially.

<unk> hundred eight.

You got to take the job.

Speaker 7: menting we start to whole invasement relation.

Okay.

Sure.

We envision those agents, Utah cellular Matthias <unk>.

Speaker 7: So at this stage, if China has new regulations, we will still apply for the port version of TC.

You've seen that the lawyers.

Which one while monthly <unk> syndrome.

Speaker 7: The Yihang 216L has obtained the trial operation certificate for the cargo transportation previously. So after there is a certification standard for this kind of aircraft, we will supply for a test certification for the Yihang 216L. Before the cargo version of the Yihang 216L is released, we will expand our business. We will continue to operate based on the cargo version of the Yihang 216L.

P J.

They have 216.

Obtained the operations how operations certificate for the cargo transportation previously.

So actually there is a.

Certification standards for these kind of aircrafts.

Hi.

Testification water you have to ethics al women their rewards points.

Pointless.

Pleasure.

Youll see us in Florida, almost it's easy.

Hello, Matt.

As a business unit.

Speaker 7: Well, back to the end, thank you, again.

Not all of it.

Yeah.

Speaker 2: Before we obtain the certificate of the EHAN 2.6L, we can still extend our business based on the trial operation permit that we have obtained.

You said right.

Before we obtain that absolutely can't update onto ethics al will still extend our business based on the <unk>.

Our operation.

Our image that we have to obtain.

Speaker 7: We will also formally apply for the L216 on the port version of TC. Based on the TC that L216S has already obtained, we will get the port version of L216S very soon in the case that the basic structure remains unchanged.

Well I don't know.

I don't know.

Let's turn to the employee.

These days.

While many of which unit.

Joseph.

Oh Gee I wanted to ask was about the.

The other piece of it the cheerful ocean business in Hong Kong.

On the hook for quite an adult.

Speaker 7: As the EHANG-216L and S share the same flight platform, so we can leverage the experience from the type certification for the passenger model. So we can expect to take shorter time on the EHANG-216L type certification than that of the passenger one. OK, thank you, Tianfang. Thank you.

Appointment of PC.

And the E L.

Oh and S share the same right.

Platform, so we can leverage it.

<unk> from the types of vacation for the passenger model. So we can expect to have a shorter time on the ehow to ethics al type certification that out the pascagoula.

Is.

Does it have.

Thank you.

Thank you.

Speaker 1: Thank you. We are now going to proceed with our next question.

Thank you we are now going to proceed with our next question.

Speaker 1: And the questions come from the line of Laura Lee from Deutsche Bank. Please ask a question. Your line is open.

And the question is come from the line of Laura Lee from Deutsche Bank. Please ask your question. Your line is opened.

Speaker 2: Hey, thank you for taking the questions and congratulations on receiving the first TAP certificate. The first question is, we already talked about the backlogged orders, but just clarification on this. Would you expect to be able to collect deposits?

Okay.

Hi, Thank you for taking the questions and congratulations on receiving first tap certificate.

My first question is.

We are already talk about the backlog orders, but just clarification holders would you expect to be able to collect deposits and also whether you expect the first kasler pay utilized to occur.

Speaker 2: And also, when will you expect the first customer pay-in flyer to occur?

Speaker 9: And my second question is how should we think about the cash born trajectory and your future financing plans?

And my second question is how should we think about the cash burn trajectory.

Our future financing plans.

Thank you.

Speaker 5: Thank you for the question for your 1st question.

Thank you for the question or your first question.

Speaker 5: As mentioned before, after securing the TC, we have seen a surge in interest and increase from many domestic and global customers. For our pre-order and order of intent, we charge a small, non-refundable deposit, which varies by customer, to confirm their commitment.

<unk>.

As mentioned before that.

We are after securing the PC, we have seen a surge in interest in inquiries on.

Many domestic and global customers.

Our pre order and order of intent, we charge, a small nonrefundable deposits, which varies by customers.

Confirmed their commitment to purchase.

Speaker 5: And for the pressure so that right now we will collect about 3% for down payment and then for the remaining 60 to 70% before the deeper. Well for you.

And for the precious order right now, we will collect about 3% or down payment and then for the remaining 60% to 70% before delivery.

So for your second question.

Speaker 5: cash burn situation in Capitol Hill. Our current average monthly cash burn rate of our operation is less than 10 minute R&D, or roughly less than about US dollar 1.4 minutes.

Cash burn situation.

Our current average monthly cash burn rate.

Our operation is less than 10 million RMB or roughly that then about U.

U S dollar $1 4 million.

Speaker 5: At the end of the third quarter, we have $295.6 million of cash, cash equivalent short-term investment and research short-term deposit.

As the end of our third quarter, we have $295 6 million of cash cash equivalent and short term investments and Richard that shortened deposits.

Speaker 5: Therefore, we believe that our current cash and cash equivalent of our anticipated cash flow from operations will be sufficient to meet our anticipated working capital requirements.

Therefore, we believe that our current cash and cash equivalents of our anticipated cash flow from operations.

There is sufficient to meet our anticipated working capital requirement.

Speaker 10: Looking forward, as we sell and deliver more products per customer's request and steadily expand our commercial operations in the future, our cash flow will improve and we are confident that our company can generate positive cash flow in the later part of 2024. Thank you.

Looking for.

As we sell and deliver more products for our customers request.

Expand our commercial operations in the future.

Our cash flow will improve.

We are confident that our company can generate positive cash flow in the later part of 2024.

Thank you.

Okay.

Thank you so much.

Thank you we are not going to proceed with our next question.

Speaker 1: And the questions come from the line of Yu Chen from Hightong Securities. Please answer your question, your line is open.

And that question comes from the line of <unk> Chen from <unk> Securities. Please ask your question. Your line is open.

Speaker 11: Okay, thank you very much, Yihang.

Okay.

Oh, that's great handgun.

Speaker 11: I am Chen Li from Haitong. First of all, congratulations to the bank for achieving very good results. I mainly have three small questions here that I would like to ask you.

Oh sure.

Mr. Tim go for that.

Oh, <unk> Sangha from an adult Lindsay back down.

Speaker 11: First of all, the first question is about our order. We also know that the company has a lot of pre-order orders in the future. Judging from the situation in the third quarter, we have already paid 17 216. According to a financial guidance from the fourth quarter, according to the revenue recommendation, does it mean that in the entire fourth quarter, our 216 may be paid three times as much as in the third quarter? In addition, we also want to understand the situation in the future.

Oh, sure Kuehne, <unk> Nagel and judo hydroplane women Greenbank.

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Okay.

Thank God.

Conscious, particularly with how 'bout driven.

Sure Neal.

Women can change alter the nordstrom's English or at that John.

So there you go.

Some questions. So I think it was a different Johnson.

The other one yourself relative to just your plain vanilla.

Speaker 11: in terms of the delivery of the entire order. This is a question about the order. The second question, as the analyst mentioned earlier, is about our overseas market verification. Because we also understand that there are a lot of companies overseas

Jen <unk>.

That's helpful Doug.

The <unk> geography, <unk> tissue to me thank.

Thank you Sir.

Sure.

Right.

Sure.

Well Linda.

What does your door.

Speaker 11: Customers have already signed some pre-orders. We want to know how long it will take for the whole pipeline to be certified by the overseas government. Do you have any expectations about the delivery situation of the entire overseas market order? Is it possible to land in the next few years?

Okay.

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The answer to the Cameroon Gwen.

Goes to Huntington.

We've got pipeline back I was shocked.

100 <unk>.

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No no.

It doesn't go into the classroom.

No certainty about the so called.

And that kind of one <unk>.

Sure Doug.

That's helpful Dan.

Sean I'm sorry.

No.

Gotcha.

Neil.

Uh huh.

Okay.

Nah women that are recorded.

Joseph Jordan.

So I'll go on phone calls.

Speaker 5: VPI ??????????,????????????,??????????????,??????????,??,??? Yeah, I kind of briefly repeat your question that the first question is the how about the order for the next two years. Um, and then the validation of a Thai certificate overseas, how long will it take? And thirdly, regarding the SP price of a

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Gotcha.

I don't know whether you are touching those additional.

602, hydro sources and landmark here Kannan.

This is Joe.

Speaker 12: Are you trying to?

Our incentive pool.

Speaker 5: Uh, yeah, I kind of briefly repeat your question that your first question is the how about the order for the next two years?

Yes.

Yes.

Briefly repeat your question.

First great question.

The order for the next two years.

Speaker 5: And then the validation of a type of the cane overseas, how long will it take? And thirdly, regarding the SP price of a 216.

And then.

The validation of the types of this K in overseas, how long would it take.

And thirdly regarding the ASP price of 206.

Speaker 5: As we see that our guidance for the fourth quarter, basically, the 216 volume has increased quite a lot and for the next three years, actually, I would say that the first year of the next year of 2024, the majority of the order will come from domestic sizing places or authentic spots in China.

Yes.

We see that our guidance for the fourth quarter basically.

<unk> volume has been created.

And for the next three years actually I will see that the first year of a 2000 next year of 2020 for the majority of the older will come from Tom.

Domestic pricing peices authentic spot in China.

Speaker 5: We estimate that in China there are over 6,000 scenic spots that can apply our products in their location to enhance their revenue.

We estimate that in China there are.

6000, cynics, Bob can apply our products in their location to enhance their revenue.

Speaker 13: You know, even we use like 10% penetration range, each site use five units, that'll be like over 3,260 men.

Even we use.

At 10% penetration ran Asia site that yourself by units that will be like over 3206 demand for them.

Speaker 13: from domestic cynic spot in the next several years. So 2024, we'll see a strong demand coming out from a cynic spot in China.

Domestic so next up in.

In the next several years, so 2024 will see a strong demand coming out of fall.

Speaker 13: And the application for overseas validation of TC will be a lot shorter than the TC we have obtained from the CAC. We are expecting that roughly about, should not be, maybe 12 months more or less for the local, for the government to get approval for validation TC.

Spot in China.

Ill.

The.

Application for oversea validation of PC.

There will be a lot shorter than the pizza, we have 10 four months.

We are expecting that roughly about.

It should not be maybe 12 month more or less.

For the local partner.

For the government to get approval for vegetation Tc saw.

Speaker 13: So, even though we have seen a strong demand from globally right now, but we're expecting given a year of getting validation TC from different countries globally, we're expecting that global demand will come in a great way in 2025. So, in 2025, the growth driver will be the domestics in this part demand, as well as the.

So even though you have seen a strong demand globally right now, but we are expecting give a year of getting validation PC form.

Different countries globally, we're expecting the.

Global demand.

We'll come a great way in 2025, so in 2025 gross driver it won't be the domestics in his part demand as well as the.

Speaker 5: international order in 2025. And then come to the later part of 2025 for transportation purpose demand of our 216 will start to contribute a meaningful portion of our business.

International orders in 2025, and then come to the later part of 2025 for transportation purposes of demand of our 2006 will start to contribute a minute board.

A portion of our business.

Speaker 13: after one to two years build out for the infrastructure and the

Yes.

After one to two years.

For the infrastructure.

Speaker 13: in cooperation with the local government in China. So in 2026, there will be three ways of revenue contribution orders. So first one is, again, the domestic sending spot. And secondly, global order. And thirdly, for transportation purpose of 206.

<unk>.

And Taco cooperation with local government in China.

So 2026 there'll be three ways of revenue contribution odors.

So first one is again, the domestic us Bob and secondly, global water and 30.

For transportation purposes of 2006, so all of this work will be will contribute a lot of our revenue in the next three years and other than that.

Speaker 5: So all these will contribute a lot of our revenue in the next three years. And other than that, our logistics version of a 216, as well as the firefighter version of a 216, will also provide a strong growth driver for our revenue going forward.

Our largest conversion of our <unk> as well as the buyer.

Our version of up to one six or also provide a strong growth driver for our revenue going forward.

Speaker 13: And regarding to the SP of 216, yes, we saw that there's a slight increase on SP third quarter versus second quarter. And especially after we obtain TC, we will have a stronger position in our pricing, right? So 216, sorry, 2.16 million RMB per selling price. That's a listed selling price.

And regarding to the FDA about 216.

Yes.

There is no sale.

<unk> increased our ASP.

Third quarter vessel.

Second quarter.

And especially after we obtain QC, we will have a strong.

<unk> in our pricing right. So that's one.

And <unk>, sorry, $2 6 million RMB selling price.

Speaker 13: and we sometimes give certain discount to our customers. But after we obtained TC, we think the pricing.

The selling price.

And we sometimes get certain discounts to our customers, but after we obtain Tc.

The pricing.

Speaker 10: will be stronger. So we should expect slightly increase on the S&P. And especially if those order coming from overseas, we can even sell a lot higher price. Yeah, so we're actually looking forward that there's also upside on the S&P price for 2016. Thank you.

We'll be stronger so all should expect slightly increase on the <unk>.

And especially if those order coming from overseas, we can't even sell lot higher price, yes. So.

So gradually looking forward, but there is also upside price spoke to Wednesday.

Thank you.

Yes.

Okay.

Clear.

Speaker 1: Thank you. Seeing no more questions in the queue, let me turn back the call to Ms. Anne for closing remarks.

Thank you, saying no more questions in the queue, Let me turn it back the call to Mr. <unk> for closing remarks.

Speaker 2: Thank you, operator, and thank you all for participating on today's call. If you have any further questions, please contact our error firm by email or participating our following master events through the calendar information provided on our website. We appreciate your interest and look forward to our next call. Thank you.

Okay.

Thank you operator, and thank you all participating on today's call you'll have any further questions. Please contact our IR firm by email or participating are following investor events.

Culinary Foundation provided our IR website, we appreciate your interest and look forward to our next earnings call. Thank you.

Speaker 1: Thank you all again. This concludes the call. You may now disconnect your lines. Thank you.

Okay.

Thank you all again this concludes the call you may now disconnect your lines. Thank you.

Yeah.

Okay.

[music].

Yeah.