Q2 2024 EHang Holdings Ltd Earnings Call

August 22, 2024

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Operator: Good day, ladies and gentlemen.

Operator: Thank you for standing by, and welcome to the Ehang second quarter of 2024 earnings conference call.

Operator: Thank you for standing by, and welcome to Ehang's second quarter of 2024 earnings conference call. As a reminder, we are recording today's call.

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

Speaker Change: goodday ladies and gentlemen thank you for standing by and welcome to the ehang second quarter of two thousand and twenty four earnings conference call as a reminder we are recording today's call now we will turn the call over to ang e hungks singing a director of investor relations

Operator: Now we'll turn the call over to Anne Ji, Ehang's Senior Director of Investor Relations.

Anne Ji: Now we'll turn the call over to Anne Ji, EHang's Senior Director of Investor Relations.

Anne Ji: Miss Anne, please proceed. Hello, everyone. Thank you all for joining us down today's conference call to discuss the company's financial results for the second quarter of 2024. The earnings release is available on the company's IR website. Please know the conference call is being recorded, and the audio replay will be posted on the company's IR website.

Operator: Miss Anne, please proceed.

Speaker Change: miss an please proceed

Anne Ji: Hello, everyone.

Speaker Change: i

Anne Ji: Thank you all for joining us on today's conference call to discuss the company's financial results for the second quarter of 2024.

Speaker Change: hello everyone thank you all for joining us down today's conference call to discuss the company's financial results for the second quarter of two thousand and twentyfour

Speaker Change: the earnings release is available on the company's irour website please know the conference callal is being recorded and the audio replay will be posted on the company's irwebsite

Anne Ji: On the call today, we have Mr. Huazhi Hu, our founder, chairman and chief executive officer; Mr. Zhao Wang, chief law-plating officer; and Mr. Kona Yang, chief financial officer and a director of the board. The management team will successfully give prepared remarks. Remarks to deliver in Chinese will be followed by English translations. Old translation is for convenience purpose only. In case of any discrepancy, the management statement in a regional language will prevail.

Speaker Change: on the code today we had mr ver who our founder chairman and achief executive officer mr joaww chief operating officer and the mr comayoung chief financial officer and a director of the board

Speaker Change: the management team were successfully they gave prepared to remarks remarks to delivery in chinese will followed by english translations

Speaker Change: all translation is full convenience purpose only in case of any discrepancy the management statement in a origitional language will prevalil a q session will follow afterwards

Anne Ji: A Q&A session will follow afterwards. Before we continue, please know that today's discussion will contain forward-looking statements made pursuant to the safe harbor provisions of the U.S. private security's litigation reform act of 1995. Forward-looking statements involve the inherent risks and anxieties. As such, the company's action results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in a company's public filing with the ICC. The company does not assume any obligation to update any forward-looking statements, except as required to enter equitable law. Also, please know that older members presented IENR and B and are for the second quarter of 2024 and last dated otherwise.

Speaker Change: before we continue please know that todaythis discussion will contain forward-looking statements made per to the safe harbbor provisions of the u s private securities litigation reform acts of one thousand ninety five

Speaker Change: forward-looking statements involvedve the herenrenttal risks and un certainties

Speaker Change: as such the company's actual results may be maturely different from the expectations expressed today further information regarding these and other risks and certaines is included in the company's public filings with zc

Speaker Change: the company does not assume many obligation to update any forward-looking statements except as required to enter apquable law

Speaker Change: also please know that older numbers presentident iingrmb and are for the second quarter of two thousand and twenty four and last dated otherwise

Huazhi Hu: With that, let me now turn over to our CEO, Mr. Huaju Hu.

Huazhi Hu: Please go ahead, Mr. Hu. 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Speaker Change: with that let me now turn it over to our ceo misterr huha hoo please go ahead mister hoo

Anne Ji: The earnings release is available on the company's IR website.

Anne Ji: Please note the conference call is being recorded,

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Huazhi Hu: We are not only participating in China's首部, but also the foundation of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution of the constitution This year is the 10th anniversary of the epidemic.

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Huazhi Hu: From the beginning of the company, the founder of the whole U.S. industry is the founder and leader of the leader. In the past, the U.S. manufacturing and manufacturing of the U.S. industry and the manufacturing of the U.S. industry. and the manufacturing of the U.S. industry and the manufacturing of the U.S. industry and the U.S. industry and the manufacturing of the U.S. industry and the U.S. industry and the manufacturing of the U.S. industry and the U.S. industry and the manufacturing of the U.S. industry and the U. S. industry and the manufacturing of the U.S. industry. and the manufacturing of the U.S.

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Speaker Change: this is the english translation on a mister ho's remarks

Speaker Change: hello everyone thank you for joining yehouse' earnings call

Speaker Change: since the second quarter of this year as a leading company in a avvideital industry eh has achieved a remarkable results in monivo aspects including financial performance orders and a deliveries production runup industry standards and certifications

Operator: Good day, ladies and gentlemen.

Operator: Good day, ladies and gentlemen. Thank you for standing by and welcome to the Ehang's second quarter of 2024 earnings conference call. As a reminder, we are recording today's call.

Operator: Thank you for standing by and welcome to the Ehang's second quarter of 2024 earnings conference call.

Speaker Change: operation science deployment and a rnd of next generation technologies and a product this is enabling us to continue leading the global urban bility industry

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

Anne Ji: Now we'll turn the call over to Anne Ji, Ehang's Senior Director of Investor Relations.

Anne Ji: Now we'll turn the call over to Anne Ji, Ehang's Senior Director of Investor Relations. Miss Anne, please proceed.

Anne Ji: Miss Anne, please proceed.

Speaker Change: this april was successfully obtained a production certificate which is the pc for our e and sixteen s

Anne Ji: Hello, everyone.

Anne Ji: Hello, everyone. Thank you all for joining us down today's conference call to discuss the company's financial results for the second quarter of 2024. The earnings release is available on the company's IR website. Please know the conference call is being recorded, and the audio replay will be posted on the company's IR website.

Anne Ji: Thank you all for joining us down today's conference call to discuss the company's financial results for the second quarter of 2024.

Speaker Change: we are proud to be the worst only ebita designer developer and a manufacturer to possess three certifications for the pilalote passenger carrying evb aircraft

Anne Ji: The earnings release is available on the company's IR website. Please know the conference call is being recorded, and the audio replay will be posted on the company's IR website.

Speaker Change: with these three certifications in hand we have also benefited from china's durable policies that brings strong support for the development of the low altitude economy as the national strategic emerging industry

Anne Ji: On the call today, we have Mr. Huazhi Hu, our founder, chairman and chief executive officer, Mr. Zhao Wang, chief law-plating officer, and Mr. Kona Yang, chief financial officer and a director of the board. The management team will successfully give prepared remarks. Remarks to deliver in Chinese will followed by English translations. Old translation is for convenience purpose only. In case of any discrepancy, the management statement in a regional language will prevail. A Q&A session will follow afterwards.

Speaker Change: driven by the widest prereaded development plans across the country and a strong market demand for innovative low altitude aircraft

Huazhi Hu: industry and the manufacturing of the U.S. industry.

Anne Ji: The management team will successfully give prepared remarks.

Speaker Change: our ebitida product as a representatives of the new quality productive forces promoted by a nation have gunnered a large number of customers and about orders

Anne Ji: Remarks to deliver in Chinese will followed by English translations.

Anne Ji: Old translation is for convenience purpose only. In case of any discrepancy, the management statement in a regional language will prevail.

Speaker Change: our delivery volume and the revenues borich record highizing q two

Anne Ji: A Q&A session will follow afterwards.

Anne Ji: Before we continue, please know that today's discussion will contain forward-looking statements made pursuant to the safe harbor provisions of the U.S, private security's litigation reform act of 1995. Forward-looking statements involve the inherent risks and anxieties. As such, the company's action results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in a company's public filing with the ICC. The company does not assume any obligation to update any forward-looking statements, except as required to enter equitable law.

Speaker Change: we deliverred the forty nine units of eight hundred and six s a knife only increase year-over-year

Speaker Change: quarterly revenues serves to one hundred two million r nb also a knife o increase year-over-year and a sixty-five percent increaseed quarter over quarter

Anne Ji: Forward-looking statements involve the inherent risks and anxieties. As such, the company's action results may be materially different from the expectations expressed today. Further information regarding these and other risks and uncertainties is included in a company's public filing with the ICC.

Speaker Change: moreover we achieved a quarterly adjusted in net income earlier than we expected which marks a very promising start the company's q to gth margin was as high as sixty two point four percent

Anne Ji: and the audio replay will be posted on the company's IR website.

Huazhi Hu: The company's Q2 growth margin was as high as 62.4%, with both year-over-year and quarter-of-a-quarter increase.

Anne Ji: On the call today, we have Mr. Huazhi Hu, our Founder, Chairman, and Chief Executive Officer,

Anne Ji: Mr. Zhao Wang, Chief Operating Officer, and Mr. Connor Yang, Chief Financial Officer and Director of the Board.

Huazhi Hu: Since Q4 last year, we have received over 1,100 units in bulk pre-orders in the Chinese market. This number is continuing to grow.

Speaker Change: both euro-year and a quarter of a quarter increase

Anne Ji: The company does not assume any obligation to update any forward-looking statements, except as required to enter equitable law.

Speaker Change: since q four last year we have received over one thousand and one hundred units bulk preorders in the chinese market

Huazhi Hu: After securing the PC, our Info Production Facility has started a production ramp-up of the Certified E-16S. We will continue to improve production efficiency, strictly in accordance with aircraft production procedures and quality management systems, and steadily increase our production deliveries according to the customer's order requests.

Anne Ji: Also, please know that older members presented IENR and B and are for the second quarter of 2024 and last dated otherwise.

Speaker Change: this number is continuing to grow after securing the tc our info production facity has started a production ramp-up of the certif-ied two and sixteen as

Anne Ji: With that, let me now turn over to our CEO, Mr. Huaju Hu.

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

Speaker Change: we will continue to improve production efficiency strictly accordance with aircraft production and procedures and a quality management systems in steadily increase our production and deliveries according to the customers's order requests

Huazhi Hu: Please go ahead, Mr. Hu.

Huazhi Hu: To meet the continuous delivery of long-term bulk orders, we are also planning for the future production capacity expansion. Based on the four-party strategic cooperation agreement we signed in Q1 this year with the Management Committee of the Guangzhou Airport Economic Zone, the Administrative Committee of Guangzhou Economic and the Technological Development District, and the GAC, which is Guangzhou Automobile Group. We further signed an MOU with GAC in June, with the intent to establish a joint venture. This joint venture will leverage GAC's expertise and advantages in intelligent manufacturing and automated production lines for electric vehicles to produce pilotless passenger-carrying aircraft in Guangzhou.

Speaker Change: to meet the continuous delivery of long-term baorders we are also planning for the future production capacity expansion

Speaker Change: based on a four party is strategic cooperation agreement resigning q one this year with the management committee of the ganro airport economic zone the administrative committee of gandro economic and the technological development to district

Huazhi Hu: [inaudible] Mr. Huaju Hu, Mr. Huaju Hu,[inaudible][inaudible][inaudible] The company's Q2 growth margin was as high as 62.4% with both year-over-year and quarter-of-a-quarter increase.

Huazhi Hu: [inaudible] Mr. Huaju Hu, Mr. Huaju Hu,[inaudible][inaudible][inaudible] The company's Q2 growth margin was as high as 62.4% with both year-over-year and quarter-of-a-quarter increase. Since Q4 last year, we have received over 1,100 units in bulk pre-orders in the Chinese market. This number is continuing to grow. After securing the PC, our Info Production Facility has started a production ramp-up of the Certified E-16S. We will continue to improve production efficiency, strictly in accordance with aircraft production procedures and quality management systems, and steadily increase our production deliveries according to the customer's order requests.

Speaker Change: and the gac which is oneandra automobile group with other sign l mou with jacc in june with the intent to establish a joint venture

Speaker Change: this joint winter will leverage gas's expertise and advantages in intelligent the manufacturing and automated production line for electric vehicles to produce palless passenger carrying airparty oneangejo

Huazhi Hu: We look forward to this cooperation to further enhance our future production capacity, which will allow us to respond to the market demand more quickly and to lift the efficiency and still of our product deliveries.

Speaker Change: we look forward to this cooperation to further enhance our future production capacity which will allow us to respond to the market demand more quickly and the lefficiency andof sale of our productive deliveries

Huazhi Hu: Delivery is merely the starting point, whether for e-hang or customers. Equally important at a provision of exceptional after-sales support, personnel training, site planning, operational standards, and system development. Our current customer service and business focus are both sales and operations, while maintaining a steady stream of our product deliveries and ensuring safe operations.

Speaker Change: delivery is merely the starting point whether for eha world customers equally important at a provisation of the exceptional after sales support personneal training side planning operational standards and system development

Speaker Change: our current customer service and a business focus are both sales and operations while maintaining the steady stream of our product deliveries when the ensuring safe operations

Huazhi Hu: As the global pioneer of our pilotless orbital provider, we are taking the responsibility to explore commercial operations through collaborating closely with the regulatory authorities, customers, and partners to co-create a sustainable ecosystem that fosters the industry's growth and development. With that, we are focusing on three key areas in which we have achieved significant progress.

Speaker Change: as the global pione of our pality bidle provider where taking the responsibility to explore commercial operations through collaborating closely with the regulatory authorities customers and panish to cocreate a sustainable ecosystem that fostter industri' growth and the development

Speaker Change: with that we are focusing our three key areas in which we have achieved a significant progress

Huazhi Hu: The first one is talent cultivation. We have developed a customized VETO aircraft personnel training program and assessment system, designed to equip our customers with a qualified operational team, ensuring safe operations.

Speaker Change: the first one is talent cultivation we have developper a customized theavvo aircraft personnel training program and assessment system designed to equip our customers with qualified operational team ensuring safe operations

Huazhi Hu: Secondly, infrastructure development. We are not only actively participated in the formulation of China's first group standards for technical requirements of the VETO verteboards, but also collaborated with local government and customers to establish e-hang to section S verteboards and the low altitude urban mobility operations center demonstration projects. In Guangzhou, Hubei, Xinjiang, Zhuhai, Taiyuan, Wencheng, and among other locations.

Speaker Change: secondly infrastructure development

Speaker Change: we're not only actively participated in the formulation of china's first group standards for technical requirements of the ebit of vertboards

Speaker Change: but also collaborated with local governments santa customers

Speaker Change: to stop as she hand to sesixteen as ber reports

Speaker Change: and a low altitude urb am mobility operations er demonstration projects in ganjo who of a changent johigh tian wchong and among other locations

Huazhi Hu: Thirdly, operational standards and certification. In July, the CAC accepted the error operator certificate or OC applications submitted by the Ehang General Aviation and Huazhi Hu Yi Aviation. As the worst-first OC project for the pilotless passenger carrying Vero aircraft, it is paving the way for the establishment of the worst-first commercial operation standard for the pilotless passenger carrying Vero's.

Speaker Change: certainly operational standards and the cerification

Speaker Change: in july the ac accepted in the error operatorsor certificate or o applications submeeted by the eha generalization and a hocal aviation

Speaker Change: as the worst first o project for the panelist passenger carrying bita aircraft it is paidving the way for the establishment of the world's first the commercial operation standard for the palest passenger carrying middles

Huazhi Hu: As an innovative technology company, we will not slow down our pace in R&D for new products and technologies while pushing forward with those and operations. Building on the VT30 prototype, we have conducted a comprehensive redesign and technological upgrade of our least-encrusive Vero model, aiming to achieve more exceptional flight performance.

Speaker Change: as an innovative technology company we will not slow down our pace in randd for new products and technologies while pushing for world with those and operations

Speaker Change: building on a v thirty prototype we have a contducted a comprehensive redesign and the technological upgrad of our reliefed and cruy bitidle model aiming to achieve more exceptional flight performance

Huazhi Hu: We will be releasing this soon, so please stay tuned for the exciting news. We are also continuously optimizing the performance of R&D216S. In the critical areas of a battery technology, we are developing next-generation Vero battery solutions that meet the 4-H standards, which means high-energy density, high cycle-life, high instantaneous charge discharge rate, and high safety. For example, in April, we partnered with Quator Bay Technology, a battery provider incubated by Guangzhou Automobile Group, for the research and development of the worst-first ultra-fast charging battery solutions for evidels. This is expected to significantly improve the Vero operational efficiency and meet the demands of the last-scale high-frequency UAM operations.

Speaker Change: we will be releasing the soon so please stay tds for the exciting news

Speaker Change: we are also continuously optimizing the performance of already two and sixteen f

Speaker Change: in a critical areas of a battery technology we are developing next-generation avail battery solutions that mean in the poor asia standards which means high energy density high pscholife

Speaker Change: high instantaneous charge discharge rate and a high safety

Speaker Change: for example in april with pannerss with quaterobay technology a better provider ingrvated by quander automobile group for the research and the development of the wor's first outtrrofast charging battery solutions for ebitos

Speaker Change: this is expected to significantly improve the middle operational efficiency and meia demands of the last scale high frequency um operations

Huazhi Hu: Furthermore, we are also testing the solid-state VTM battery cells developed in collaboration with INC. Meanwhile, we also continuously researching and developing new technologies and solutions for core components, such as electric motors, propellers, and materials, educating and upgrading them to achieve sustained improvements. We have also cooperated with more high-quality suppliers, such as True High-Impower Electric Company, a leading EV powertrain provider into our system. This not only enhances the fly performance of our aircraft, but also helps to strengthen the stability of our supply chain and support our industrial layout.

Speaker Change: furthermore we are also testing the solid day lium battery sults developing incollaboration with inks

Speaker Change: meanwhile we are also continuously researching and developing new technologies and solutions for core components such as electric modtis propellers and a materials ederating and operating them to achieve sustaining improvement

Speaker Change: we have also cooperated with more high-quality suppliers such as true high-em-power electrroic company a leading ev power trains provider into our system

Speaker Change: this not only enhances the fly performance of our aircraft but also helps to strengthen the stability of supply chain and the support our industrial layout

Huazhi Hu: Also, our newly upgraded R&D laboratories are nearing completion at our new high-corders, designed to support the development and testing of new technologies and components, such as batteries and electric motors. I'm also delighted to share with you that our new high-corders and supporting facilities located on the banks of the Pearl River in Guangzhou Huangpu District are currently under construction. This complex will feature a state-of-art exhibition center, and a brand-new, commanding and control center, and a future-risk state's office. Furthermore, we will integrate with the surrounding communities and the commercial complexes to launch aerosicying and transportation routes with our evidels, connecting ground air and water transportation and creating a new urban landmark, Ehang Future City, as well as a UAM demonstration area for low-altitude economy in a greater bay area.

Speaker Change: also our newly upgraded r in delaboratories are ineering completion at our new headquers designed to support the development and testing of new technologies and the components such as batteries and the electric motors

Speaker Change: i'm also delighted to share with you that our new headcorters and are supporting facilities located on a ban of the pro river in quand onput district are currently andrew construction

Speaker Change: this complex will ffeuture a dataof our exhibition center and a brand newal commity and control center and a future riskateates office baseed

Speaker Change: further more we will integrate with the surwronging communities and the commercial complexes to lunch erif i seeing and transportation routes with our bitidoals

Speaker Change: connecting ground air and water transportation and a creating a new urban landmark eha future city as well as a um demonstration area for low atttitude the economy in a greater bay area

Huazhi Hu: As we celebrate, Ehang's 10th anniversary will reflect on our journey from humble beginnings to becoming a global troglizer and a leader in the UAM industry. Throughout, we have remained set first in our commitment to exploring pilotless passenger-carrying aircraft and NFC applications, driving innovations in technologies, concepts, and standards. From pioneering the worst-first pilotless passenger carrying vehicle prototype to achieving the safe and reliable flights of a pilotless event. From the absence of industry standards to establishing and shaping those, and subsequently obtaining the worst-first type certification, production certificate, and standard airworthiness certificate. We have consistently pushed the boundaries from zero to one through innovations and perseverance, contributing to shaping this urban air mobility industry.

Anne Ji: The management team will successfully give prepared remarks. Remarks delivered in

Speaker Change: as we celebrate ahced tense anniversary will reflect on our journey from humble beginnings to becoming a global trlobaser and a leader in the awm industry

Anne Ji: Chinese will be followed by English translations.

Anne Ji: All translation is for convenience purpose only.

Speaker Change: throughout we have remained set thday in our commitment to exploring pilotless passenger carrying aircraft and its applications driving innovations in technologies concepts and standards

Anne Ji: In case of any discrepancy, the management statement in the original language will prevail.

Anne Ji: A Q&A session will follow afterwards.

Speaker Change: from peering the worldsts first ap palist passenger carrying evit prototype to achieving the safe and the reliable flights of a palici bidoles

Anne Ji: 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.

Speaker Change: from the absence of industry standards to establishing and shaping though

Speaker Change: and a subsequently obtaining the world's first types certificate productions certificate and the standard air was ne certificate

Speaker Change: we have a consistently coouushative boundarageed from zero to one through innovations and persevever ings

Anne Ji: Private Securities Litigation Reform Act of 1995. Forward-looking statements involve the, inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today.

Huazhi Hu: Today, our years of hard work and dedication have led to strong and stable financial performance and the long-term growth trajectory. With our passion and respect for the aviation industry, we will continue to drive a worthy and to the next exciting phase of commercial operations, creating greater value for stakeholders and shareholders.

Speaker Change: contributing to shaping this urbanam mobability industry

Speaker Change: today our years of our hard work and the dedication have led strong and a stable financial performance and the long-term growth trajectory

Anne Ji: Further information regarding these and other risks and uncertainties is included in the company's public filings with the ICC.

Anne Ji: The company does not assume any obligation to update any forward-looking statements, except as required to enter equitable law.

Speaker Change: with our passion and the respect for the aviation industry we will continue to drive aoverworthy into an the next kexciting phase alwith commercial operations

Speaker Change: creating greater value for stakeholders supporters and shareholders

Wang Zhao: Next, let me turn the call over to our CEO, Mr. Wang, to elaborate on our Q2 operational performance. Thank you. Thank you, Mr. Hu, and hello, I1, since securing the production certificate in April. We have been authorized for mass production of our EH-216S and secure standard airworthiness certificates for each aircraft that we have delivered. Our sales and deliver continues to grow.

mr wang: next let me turn a coover to our zero mr wang to elaborate on our q two operational performance thank you

Anne Ji: Also, please note that all the numbers presented are in R&B and are for the second quarter of 2024, unless stated otherwise.

Anne Ji: With that,

mr wang: thank you mr huo and a hello ir one

mr wang: since securing the production certificate in april we have been authorized for ma production of our eh two hundred and sixteen as and secure standard air wness certificate for each aircraft that we have delivered

Wang Zhao: In the second quarter, we deliver 49 units of EH-216S generating revenue of RMB 102, meaning, representing a year-over-year increase of our nine times and a quarter-over-quarter increase of 65%. Let me highlight some key examples of customers and partnerships. In June, we partnered with Wencheng-Joyeon Province and received a purchase order with an additional purchase plan for up to 300 units of EH-216S. We have already delivered a first batch of 27 units in the second quarter and conducted. The customer also made a prepayment for the remaining aircraft, and subsequent orders will be placed as the customer expands its operations.

Speaker Change: our sales and delivers continues to grow in the second quarter we delivever forty- nine units of e age to and sixteen as generrating revenue of rmb one hundred and two million

Speaker Change: representing a year over year increase of our nine times and a quarter of our quarter increase of sixty-five percent

Huazhi Hu: let me now turn it over to our CEO, Mr. Hua Zhihu.

Speaker Change: let me hiz some key examples of customers and partnerships

Huazhi Hu: Please go ahead, Mr. Hu.

Speaker Change: in june we panner with went some judge and province and receive the first order with an additional purchasase plan for up to three hundred units of e h twoto sixty s

Huazhi Hu: Thank you, Annie.

Speaker Change: we have already delivered the first batch of two y and seven units in the second quarter and conducted the debal flat at a local scning area immentum

Speaker Change: the customer although made up prepayment for the remaining aircraft and in subsequent orders will will be placed as a customer expands these operations

Wang Zhao: Wen Chun has become our first authorised distributor in his China to obtain provincial level distribution qualifications and will establish a comprehensive sales network for our aircraft across Georgian Province. We also delivered the first batch of 10 units of EH-265F to Xi Shan Tourism for low attitude tourism services in Taiyuan. In July, EH-265F completed its debut personal carrying flights in Taiyuan, making a milestone for development of the low attitude economy in Shanxi province. This delivery is part of a 50-unit order from Xi Shan Tourism that has been fully paid, with the customer's plans to purchase an additional 450 units over the next two years.

Speaker Change: lionon has become our first authorise this builtor in is china to obtain provincial level distribution clarifications and will establish a comprehensive sales network for our aircraft across george um province

Speaker Change: we also deliver the first part of ch units of e h two sixty to c cent tourism for low attitude choural of services entire

Speaker Change: in july exclcific as completed his debal passger carrying flies in taaan making a milestone for the development of the low attitive economy d shancy provam

Speaker Change: this the deliay is part of a fifty unit orother from seanerorm that has been fully paid

Speaker Change: with the customer pamps to purchase visional four hundred fifty units over the next years

Wang Zhao: These units will be deployed in landmark scenic areas in Taiyuan and create a series of low attitude tourism demonstration products, further advancing the construction of the low attitude economy demonstration area in Shanxi province. Furthermore, in the second quarter, Ehang also delivered EH-265F to our customers in Guangdong, Hai Nan, Gidin, Miao Ning, and Japan.

Speaker Change: these units will be deployed in lamasclinic eras entan and create a seror of low at a chosen demonstration products

Speaker Change: further advancing the construction of the low addtiate economy demonstration areaa in shancy provs

Speaker Change: furthermore in the second quarter you have also delivered e h to six as to our customers in guang highan leading nnew and japan

Huazhi Hu: Since Q4 last year, we have received over 1,100 units in bulk pre-orders in the Chinese market. This number is continuing to grow. After securing the PC, our Info Production Facility has started a production ramp-up of the Certified E-16S.

Wang Zhao: In July, we signed a sales and operation corporation agreement with Casey's Modern Mobility. As a subsidiary of Hong Kong's largest non-ventus bus operator, Khutong Bus Holding Limited, Casey's Modern Mobility plans to purchase 30 units of EH-265F for development and operations in Hong Kong, Macau, and Hubei Province, further boosting market development in Guilibe area and mainland China. Our company has received our 1,000 units pre-orders for EH-265F Evitals in China market. With the production capacity expansion, we expect to maintain a growing delivery trend in the third quarter. We anticipate the revenues of the third quarter will reach RMB 100 and 23 minutes, as we continue to receive more new orders.

Speaker Change: in july we sign the sales and operation corporation agreement with cases and mobility

Speaker Change: our subsidiary of a hongk' large is non rented bus operator coing bus holding limited

Huazhi Hu: We will continue to improve production efficiency, strictly in accordance with aircraft production procedures and quality management systems, and steadily increase our production deliveries according to the customer's order requests.

Speaker Change: cases to marrow mobility plans to purchase

Speaker Change: thirty units of ehtoc s for development and operations in hong kong macau and ho bay proams further boosting market development in gooddebate area and menland traina

Speaker Change: our company has received our one thousand units preords but the e two terrs evatles in china markets

Speaker Change: with the production capacitity expansion we expect to maintain a growient delivery trend in the soud quarter

Speaker Change: we anticipate the revenues of the third quarter will reach rmb one hundred and twenty- three minute

Wang Zhao: The increasing orders also mean a higher demand for production capacity. While ensuring that area requirements is delivery than that, we are also actively working with large, intelligent manufacturing enterprises, such as GAC, to establish a joint venture focused on production, upgrading to automated production lines. At the same time, we are expanding our useful factory to scale up our production and establishing a new manufacturing base at E-Hung, East China Regional Headquarters in Hubei City. which will meet the growing delivery demands in the East China region. We are fully committed to ensuring production and delivery while advancing commercial operation preparations, providing customers with operation training and creating application demonstration projects.

Speaker Change: as we continue to receive more new honours

Huazhi Hu: This joint venture will leverage GAC's expertise and advantages in intelligent manufacturing and automated production lines for electric vehicles to produce pilotless passenger carrying aircraft in Guangzhou. We look forward to this cooperation to further enhance our future production capacity, which will allow us to respond to the market demand more quickly and to lift the efficiency and still of our product deliveries. Delivery is merely the starting point, whether for e-hang or customers. Equally important at a provision of exceptional after-sales support, personnel training, site planning, operational standards, and system development.

Speaker Change: the increasing ords also meed a higher demand for production capacity

Speaker Change: while insur that ir air c me deliveries done as

Speaker Change: we are also actively working with large intellig manufacturing enterprisers such as gac to establish a joint venture focused on production upgrading to aumated production lines

Speaker Change: at the same time we are expanding our useful factory to calill up our production

Speaker Change: and esttablishing a new manufacturing base at the han east chiner radinal headquarters in ho which will meet the growing delivery demands in the east china region

Speaker Change: we are fully committed to inr production and delivery

Huazhi Hu: Our current customer service and business focus are both sales and operations, while maintaining a steady stream of our product deliveries and ensuring safe operations.

Huazhi Hu: Our current customer service and business focus are both sales and operations, while maintaining a steady stream of our product deliveries and ensuring safe operations. As the global pioneer of our pilotless orbital provider, we are taking the responsibility to explore commercial operations through collaborating closely with the regulatory authorities, customers and partners to co-create a sustainable ecosystem that foster the industry's growth and development.

Speaker Change: while are adevvancing commercial operation for theappparations providing customers with operation training and creating application demonstration products

Wang Zhao: In terms of operation personnel training, we provide our customers with sufficient training courses after the delivery, including theoretical learning, aircraft safety operation, daily maintenance, and emergency management, and so on. To ensure that personnel are certified and on duty to ensure operation safety. This comprehensive training program ensures that our customers are capable of operating our Evato aircraft in a proficient and compliant manner and providing safe-flight services to the public.

Huazhi Hu: As the global pioneer of our pilotless orbital provider, we are taking the responsibility to explore commercial operations through collaborating closely with the regulatory authorities, customers and partners to co-create a sustainable ecosystem that foster the industry's growth and development.

Speaker Change: in terms of operation personnel training we provide our customers we sufficient the training causes after the delivery

Speaker Change: including the radical learning aircraft safety operation dily mainptenance and emergency manment and so on to ensure that personnel as of ifieder on duty to ensure operations sasixty

Huazhi Hu: With that, we are focusing on three key areas in which we have achieved a significant progress.

Huazhi Hu: With that, we are focusing on three key areas in which we have achieved a significant progress. The first one is talent cultivation. We have developed a customized VETO aircraft personnel training program and assessment system, designed to equip our customers with qualified operational team, ensuring safe operations. Secondly, infrastructure development. We are not only actively participated in the formulation of China's first group standards for technical requirements of the VETO verteboards, but also collaborated with local government and customers to establish e-hang to section S verteboards and the low altitude urban mobility operations center demonstration projects. In Guangzhou, Hubei, Xinjiang, Zhuhai, Taiyuan, Wencheng, and among other locations. Thirdly, operational standards and certification.

Speaker Change: this comprehive training program insurres and our customers are crediable of operating our uvital aircraft in proficient and compbed manner and providing safe fide surfaces toll public

Huazhi Hu: The first one is talent cultivation. We have developed a customized VETO aircraft personnel training program and assessment system, designed to equip our customers with qualified operational team, ensuring safe operations.

Wang Zhao: At the same time, we also plan to cooperate with domestic aviation colleges and professional institutions to carry out personnel training and jointly establish systems for academy education, licensed management, and so on. For the industry's future, last scale, standardized and professional operations, our joint training program with the Civil Aviation Select University of China is now in the state of curriculum design. On the operational infrastructure front, Yihang collaborates closely by providing technical requirements and design solutions, while the infrastructure construction is managed by local governments and our customers. Operation size in key locations have been launched, including Xinjun OHB, Hefei Luo Gang Central Park, Guangzhou-Juolong Lake, Zhu Hai-Tangja Port, and Wencheng Landing Lake.

Speaker Change: and at second time we also plan to cooperate with domatic aviation colleges and the professional institutions to carry out personnow training and drally estabperished systems for the academy education licenseed management ven esola

Huazhi Hu: Secondly, infrastructure development.

Huazhi Hu: We are not only actively participated in the formulation of China's first group standards for technical requirements of the VETO verteboards, but also collaborated with local government and customers to establish e-hang to section S verteboards and the low altitude urban mobility operations center demonstration projects. In Guangzhou, Hubei, Xinjiang, Zhuhai, Taiyuan, Wencheng, and among other locations. Thirdly, operational standards and certification.

Speaker Change: for the industry's future last scale standardalized and professional operations our joint training program will rece aviation sflat university of china is now in a state of curum design

Speaker Change: on the operational infrastructure front yhan collaborative closely by providing techniical requirements and a design solutions

Huazhi Hu: In July, the CAC accepted the error operator certificate or OC applications submitted by the Ehang General Aviation and Huazhi Hu Yi Aviation.

Huazhi Hu: In July, the CAC accepted the error operator certificate or OC applications submitted by the Ehang General Aviation and Huazhi Hu Yi Aviation. As the worst-first OC project for the pilotless passenger carrying Vero aircraft, it is paving the way for the establishment of the worst-first commercial operation standard for the pilotless passenger carrying Vero's. As an innovative technology company, we will not slow down our pace in R&D for new products and technologies while pushing forward with those and operations.

Speaker Change: while the infrastructure construction is managed by local governments and our customers

Speaker Change: operation size in key locations have been launched including changin hpay her a logam central par guang row jo long lake drew high tj hot and the wian cing like

Huazhi Hu: As the worst-first OC project for the pilotless passenger carrying Vero aircraft, it is paving the way for the establishment of the worst-first commercial operation standard for the pilotless passenger carrying Vero's.

Wang Zhao: Each of these sizes is equipped with facilities including dedicated water ports for EH-216S, hangers, and the personnel service areas. In addition, many local governments are planning to build operation networks for future air mobility. For example, Xinjun Park is set up a thousand of low-attitude take-off and landing platforms, and Guangzhou-Panthu Invest are being 10 billion into low-attitude infrastructure. This will include over a hundred revenues, verticals, and hundreds of community landing paths. Our EH-216S is ideally suited for future urban air transportation. It's compact, lightweight, can fly autonomously, easy to manage fleets, and cost effective.

Speaker Change: each of these size is equippeded with facilities including dedicated what it pas for eh two and sixty as hangers and the passenger service ers

Huazhi Hu: As an innovative technology company, we will not slow down our pace in R&D for new products and technologies while pushing forward with those and operations.

Speaker Change: in addition many local governments are planning to build operation networks

Huazhi Hu: Building on the VT30 prototype, we have conducted a comprehensive redesign and technological upgrade of our least-encrusive Vero model, aiming to achieve more exceptional flight performance. We will be releasing this soon, so please stay tuned for the exciting news. We are also continuously optimizing the performance of R&D216S. In the critical areas of a battery technology, we are developing next-generation Vero battery solutions that meet the 4-H standards, which means high-energy density, high cycle-life, high instantaneous charge discharge rate, and high safety.

Speaker Change: for future animmobility

Speaker Change: for example ginger and targets will should have a f of low attitude takeoff and landing platforms and oneanjo plant to invest r mb ten bill into a low attituive infrastructure

Speaker Change: this will include over one hundred rap values very pa and hand of community lending imp

Huazhi Hu: We are also continuously optimizing the performance of R&D216S.

Speaker Change: our eh two and six s is ide dutited for future urban air transportation as compact lightware can ly autperacly easy to many flees and cost effective

Huazhi Hu: In the critical areas of a battery technology, we are developing next-generation Vero battery solutions that meet the 4-H standards, which means high-energy density, high cycle-life, high instantaneous charge discharge rate, and high safety.

Wang Zhao: In May, we will actively involve in shaping China's first group standard for equator water ports. This will set a state for future industry standards. Not only all water ports built in accordance with this standard will be able to accommodate EH-216S. In terms of operations standards and certification, as Mr. Hu mentioned in July, the CAAC accepted the air operator certificate or OC applications by two operators. One is Yihang General Aviation, our subsidiary for UAM operations. The other is He Yi Aviation, our operation joint venture in Hefei. The CAAC has finished reviewing of her e-aviation application documents and is about to conduct on-set inspection soon.

Speaker Change: you may we will actually involve in shaping china's first to group standard for ev told what he thought this will stand state for future industry standard not by all ready postbuilt corance with this standard will be able to accommodate the h two hundredand six s

Huazhi Hu: For example, in April, we partners with Quator Bay Technology, a battery provider incubated by Guangzhou Automobile Group for the research and development of the worst-first ultra-fast charging battery solutions for evidels. This is expected to significantly improve the Vero operational efficiency and meet the demands of the last-scale high-frequency UAM operations. Furthermore, we are also testing the solid-state VTM battery cells developed in collaboration with INC. Meanwhile, we also continuously researching and developing new technologies and solutions for core components, such as electric motors, propellers, and materials, educating and upgrading them to achieve sustained improvements.

Speaker Change: in terms of operations standards and the certification as the midsile who mentioned in july the cac accepted the air operator certificate or o the applications by two operators

Huazhi Hu: This is expected to significantly improve the Vero operational efficiency and meet the demands of the last-scale high-frequency UAM operations.

Huazhi Hu: Furthermore, we are also testing the solid-state VTM battery cells developed in collaboration with INC.

Speaker Change: one is ha general aviation our subsinary for you am operations the other is e aviation our operation joentlemenure in cofe

Huazhi Hu: Meanwhile, we also continuously researching and developing new technologies and solutions for core components, such as electric motors, propellers, and materials, educating and upgrading them to achieve sustained improvements.

Speaker Change: the thec has finished reviewing of her eaviation application documents and is about to conduct unsat inspectction soon

Wang Zhao: The first OC for packetless passenger carrying evato is expected to receive within this year, allowing the operator to launch commercial operations with EH-16S. Afterwards, we will have more customers and partners in applying OC with our accumulated experience and established safety standards. This will also help expanding our operation network.

Speaker Change: the first o for partof this passenger carrying evito is expected to receive within this year along the operatork of launch commercial operations whe ehdo sixent as

Huazhi Hu: We have also cooperated with more high-quality suppliers, such as true high-impower electric company, a leading EV powertrain provider into our system.

Huazhi Hu: We have also cooperated with more high-quality suppliers, such as true high-impower electric company, a leading EV powertrain provider into our system. This not only enhances the fly performance of our aircraft, but also helps to strengthen the stability of our supply chain and support our industrial layout.

Huazhi Hu: This not only enhances the fly performance of our aircraft, but also helps to strengthen the stability of our supply chain and support our industrial layout.

Speaker Change: afterwards we will have more customers and pannner in applying lc with our arumated experienence and established fifty standard this will also have expanding our operation network

Wang Zhao: In July, we also formed a strategy partnership with China-1000 General Aviation, a leading general aviation service provider under the China-1000 airline group. Together, we are planning to introduce a range of services, including evato terrorism, cross island flights, and cargo transportation at Zhuhai Airport, Chimelong Ocean Kingdom, and surrounding islands. Moreover, we are thrilled to see several local governments, including those in Xinjiang, Guangzhou, Hubei, and Zhuhai, are offering direct subsidies for evato commercial routes. These subsidies range from R&B 100 to 300 per passenger to flight, providing robust support for evato service operators.

Speaker Change: in july we also formed a strategy partnership with the china southern general aviation a leading general aviation service provider and ner china southern airlines group

Huazhi Hu: I'm also delighted to share with you that our new high-corders and supporting facilities located on the banks of the Pearl River in Guangzhou Huangpu District are currently under construction.

Speaker Change: together we are planning to introduce a range of services including eratital terrorism coross island flights and cargo transportation at the jha airport

Huazhi Hu: This complex will feature a state-of-art exhibition center, and a brand-new, commanding and control center, and a future-risk state's office Furthermore, we will integrate with the surrounding communities and the commercial complexes to launch aerosicying and transportation routes with our evidels, connecting ground air and water transportation and creating a new urban landmark, Ehang Future City, as well as a UAM demonstration area for low-altitude economy in a greater bay area.

Speaker Change: chim long ocean kingdom and surrounding allans

Speaker Change: well our we are failled to see several local governments including those njun quantro hofee and johigh are offering irq subsidies for evvital commercial routes

Speaker Change: these subidities range from rbone hundred of three hundred per passenger per fllight providing robust support for vital service operators in the international markets we continue to expand into the middle east market in the second quarter

Wang Zhao: In the international market, we continue to expand into the Middle East market in the second quarter. In April, we reached a strategy cooperation with the U.S. investment office and multi-level group. They will support our development in the UAE and the Middle East region. In May and June, our EH-16S completed the build flights in UAE and Saudi Arabia. Just in, our Evato footprint has expanded to 16 countries worldwide. In the third quarter, we will continue to expand our business in overseas markets, such as Africa, the Middle East, Central America, and Europe. Looking ahead, we will focus on executing our business strategy on sales and operations and delivering results consistently.

Speaker Change: in april we reached our strately corporation with the adopy investment office and the multti liabour group

Huazhi Hu: As we celebrate, Ehang's 10th anniversary will reflect on our journey from humble beginnings to becoming a global troglizer and a leader in the UAM industry.

Huazhi Hu: As we celebrate, Ehang's 10th anniversary will reflect on our journey from humble beginnings to becoming a global troglizer and a leader in the UAM industry. Throughout, we have remained set first in our commitment to exploring pilotless passenger carrying aircraft and NFC applications, driving innovations in technologies, concepts and standards. From pioneering the worst-first pilotless passenger carrying vehicle prototype to achieving the safe and reliable flights of a pilotless event. From the absence of industry standards to establishing and shaping those and subsequently obtaining the worst-first type certification, production certificate, and standard airworthiness certificate.

Speaker Change: dewewill support our development in the uae and the middle east region

Huazhi Hu: Throughout, we have remained set first in our commitment to exploring pilotless passenger carrying aircraft and NFC applications, driving innovations in technologies, concepts and standards.

Speaker Change: the may and june our eh to six s completed bal fles in uae and the saudi arabia just in our erat footprint has pended to ' sixteen countries worldwide

Huazhi Hu: From pioneering the worst-first pilotless passenger carrying vehicle prototype to achieving the safe and reliable flights of a pilotless event. From the absence of industry standards to establishing and shaping those and subsequently obtaining the worst-first type certification, production certificate, and standard airworthiness certificate.

Speaker Change: in a third quarter where we will continue to expand our business in overse markets such as africa the middle east central america and europe

Speaker Change: looking ahead will be a focus size dting our business of strategy and sales and operations and the delivering results consistently

Wang Zhao: Our goal is to play a key role in commercializing China's low-attitude economy and global UNM industry, with 50 as our top priority.

Huazhi Hu: We have consistently pushed the boundaries from zero to one through innovations and perseverance, contributing to shaping this urban air mobility industry.

Huazhi Hu: We have consistently pushed the boundaries from zero to one through innovations and perseverance, contributing to shaping this urban air mobility industry. Today, our years of hard work and dedication have led to strong and stable financial performance, and the long-term growth trajectory. With our passion and respect for the aviation industry, we will continue to drive a worthy and to the next exciting phase of commercial operations, creating greater value for stakeholders and shareholders.

Speaker Change: our goal is to play a keiro in commercializing china's low attitude economy and a global eem industry

Conor Yang: Next, I will turn the call over to our CFO, Conor Yang, on financial performance. Thanks. Thank you, Mr. Wang. Hello, everyone. This is Conor. Before I dive into details, please note that all numbers presented are in R&B and are for the second quarter of 2024. Unless stated otherwise, detailed analysis is available in our early press release on our IR website. I am pleased to report that our continued diligent execution has led to another quarter of exceptional financial results in the second quarter of 2024. We stated our review guidance by over 13%, a chief adjusted net income, and have generated positive operating cash roll for three consecutive quarters.

Huazhi Hu: Today, our years of hard work and dedication have led to strong and stable financial performance, and the long-term growth trajectory.

Speaker Change: with safety as our top periariety

Speaker Change: next i will turn the call over to our cfo corner young our financial performance thanks

Huazhi Hu: With our passion and respect for the aviation industry, we will continue to drive a worthy and to the next exciting phase of commercial operations, creating greater value for stakeholders and shareholders.

Huazhi Hu: Hello, everyone.

Huazhi Hu: Thank you for attending the E-Hang Intelligence telephone conference.

Conner Young: thank you mr one hel lo everyone this is conner beforei dive into a details please knowte that phone numbers presented are in i b and up for a second quarter of two thousand and twenty four

Wang Zhao: Next, let me turn the call over to our CEO, Mr. Wang, to elaborate on our Q2 operational performance.

Wang Zhao: Next, let me turn the call over to our CEO, Mr. Wang, to elaborate on our Q2 operational performance. Thank you.

Speaker Change: unless st it otherwise detail analysis are available in our earlyning press release on our ir website i will now highlight some key poin

Huazhi Hu: Since the second quarter of this year, E-Hang, Intelligence has been a leading company in terms of financial performance, order delivery, production expansion, standards and certification, operating point deployment, and new generation design, we are fortunate to welcome the policy spring of China's development of the low-air economy strategic new industry.

Huazhi Hu: 在全国各地如火如荼的发展规划和对新型低空飞行器的强烈市场需求的驱动下,我们的EVito繁品作为新制生产力的代表,收获了大量的客户和批量采购订单。不仅如此,我们实现了季度盈利,比我们预期的更早,这是个非常好的开端。Q2,公司毛利率高达62.4%,同比环比均实现上涨。当然,不论对于一航还是我们的客户,交付只是第一步,做好售后服务、人员培训、场地规划、运营标准和体系的建设同样重要。因此,运售并举、稳步交付、保障运营是我们当前阶段的服务客户和发展业务的宗旨。我们重点聚焦以下三个方面,并取得了丰硕的阶段性成果。一是人才培养,我们开发了一套定制化的evito飞行器人员培训课程和考核体系,为客户培养合格的运营横队,保障运行安全。二是基础建设, 我们不仅深度参与制定了中国首部针对eVito起降厂的技术规范团体标准也与各地政府和客户携手, 在广州合肥深圳珠海太原文成等地落成了EH226-S起降场地和低空UAM运营核心示范样板, 三是运营资格与认证 7月中国民航局正式受理了广东一航通航和合肥合一的运营合格证的申请, 这是全球首个获得受理的无人驾驶载人航空器的OC审定项目也意味着全球首个无人驾驶载人航空器运营标准即将诞生, 在运售并举的同时作为一家科技创新企业, 我们在技术创新和研发新产品的脚步不会停歇在VT30原型机的基础上, 我们对符合意机型进行了全新的设计和技术升级以达到更加优异的飞行性能, 我们会在近期公开发布请大家拭目以待另外我们也不断优化EH216-S的性能, 在关键电池技术方面我们正在开发下一代符合4H标准, 即具有高能量密度高充放电寿命高瞬间充放电倍率高安全性的EVTO电池解决方案, 例如今年4月份我们与广汽孵化的聚湾基岩合作开发的全球首款超快充EVTO电池, 将有望大幅度提升飞行器运行效率更好地满足UAM大规模高频次的运营需求, 此外我们和新界电池合作开发的固态锂电池电芯样品也正在测试过程中了, 我们同时还在新技术和新解决方案的电机螺旋桨和材料等核心零部件进行持续研发持续迭代升级, 并纳入了珠海英博尔等更多高质量的供应商在我们持续提升航空器的飞行性能的同时, 还能有助于产业布局增强供应链的稳定性我们全新升级的研发实验室也即将在我们的新总部落成并启用, 以支持电池电机等新技术的研发和测试今天在这里我也很高兴和大家分享, 我们在广州黄浦区珠江岸边岁港码头的一行新总部大楼和配套设施也正在建设完善中, 我们会提供更加美观大气的展示中心全新的指挥调度中心, 还有极具未来感的超现实办公区并且会结合周边智慧社区和商业体, 开通观光及交通EVTO航线连接地面空中水上的连运, 将打造成为广州新城市名片一行未来城和大湾区低空经济生态应用示范, 今年是一航成立的十周年从初创公司成长为全球UAM行业的开拓者和领导者, 我们始终致力于无人驾驶载人航空器技术和产品的研发和应用不断推动技术理念和标准的创新, 从研发世界第一架无人驾驶载人航空器的原型机再到如今无人驾驶航空器的安全飞行, 从没有行业标准到制定行业标准并相继获得全球第一张TC PC AC, 我们凭借创新和努力不断实现从零到一的跨越为普惠全人类的低空飞行科技发展贡献一份力量, 如今这些多年坚持的投入和积累为我们创造了积极稳健的财务回报和长期增长势头, 我们怀着这份初心和对航空业的敬畏之心继续投身到下一个令人期待的商业化运营核心阶段, 为行业参与者支持我们的每一位和我们的股东创造更大的价值

Wang Zhao: Thank you.

Wang Zhao: Thank you, Mr. Hu and Hello, I1, since securing the production certificate in April. We have been authorized for mass production of our EH-216S and secure standard airworthiness certificates for each aircraft that we have delivered. Our sales and deliver continues to grow. In the second quarter, we deliver 49 units of EH-216S generating revenue of RMB 102 meaning, representing a year-over-year increase of our nine times and a quarter-over-quarter increase of 65%.

Speaker Change: i am pleased to report that our continued diligent execution has led to another quarter of exceptional financial results in second quarter two thousand and twenty-four

Wang Zhao: Thank you, Mr. Hu and Hello, I1, since securing the production certificate in April.

Speaker Change: weve saiditted our revenue guidance by over thirteen percent a chiff adjusted net income and have generated positive operating cash flow for three consecutive quarters

Wang Zhao: We have been authorized for mass production of our EH-216S and secure standard airworthiness certificates for each aircraft that we have delivered.

Conor Yang: Notably, our OC application has been formally accepted by CAC, marking a significant step closer to commercial operations and accelerated growth.

Wang Zhao: Our sales and deliver continues to grow. In the second quarter, we deliver 49 units of EH-216S generating revenue of RMB 102 meaning, representing a year-over-year increase of our nine times and a quarter-over-quarter increase of 65%.

Speaker Change: notablyef our othree applications has been formally effected by caac marking a significant step closer to commercial operations and acceler growth

Conor Yang: Now, let's dive into details of our second quarter results. Total revenue in second quarter were 102 minutes representing a significant increase of 919.6% year of a year and a 65.3% increase from prior quarter. The increase was primarily driven by higher sales volume of EH216 serious products. We delivered 49 units of EH216 serious products in the second quarter, a significant growth from 5 units a year earlier and 26 units in the first quarter of 2024. Growth margin remains consistently high at 62.4% in second quarter, up to 2.2 percentage points from 60.2% in second quarter of 2023, and a 0.5 percentage point increase from 61.9% in first quarter of 2024.

Wang Zhao: 下面请我们的首席运营官王钊先生介绍二季度的经营情况谢谢这是钊先生的讲话中文翻译, 大家好感谢您参与以航的获得通知自今年第二季度以来以航为企业的领导公司, 以航在多方面获得了不可思议的成绩包括金融表现订卖和运输生产阶段, 业界标准和证据运营地点发展以及下一代技术和产品的研发, 这让我们能够继续领导全球机动航空行业今年4月我们成功获得了制造证, 也就是以航216S的制造证我们骄傲地成为唯一的设计师发展员和制造商, 并且拥有三项驾驶机动航空航空证证这三项证证在我们手中, 我们也获得了中国的可靠政策带来强大的支持为低高极度经济发展, 作为国家企业的优先发展由于国际企业的广泛发展计划, 和强大的市场需求为高高极度机动航空发展我们的制造证作为代表国家推广的新质量生产力, 获得了大量的客户和大量的订卖我们的发送量和利润都达到了Q2的新高, 我们发送了EHAN216S的49架年度增长了九倍, 平均利润达到了102亿人民币年度增长也达到了九倍, 平均利润达到了65% 此外我们也获得了平均的额外收入, 比我们预期的早这则是一个非常有信心的开始, The company's Q2 growth margin was as high as 62.4%, with both year-over-year and quarter-over-quarter increase.

Wang Zhao: Since Q4 last year, we have received over 1,100 units in bulk pre-orders in the Chinese, market. This number is continuing to grow. After securing the PC, our in-food production facility has started a production ramp-up, of the certified Ehang 216S. We will continue to improve production efficiency, strictly in accordance with aircraft production, procedures and quality management systems, and steadily increase our production and deliveries according to the customers' order requests.

Speaker Change: now let's d in into details of our second quarter results

Wang Zhao: Let me highlight some key examples of customers and partnerships. In June, we partnered with Wencheng-Joyeon Province and received a purchase order with an additional purchase plan for up to 300 units of EH-216S. We have already delivered a first batch of 27 units in the second quarter and conducted The customer also made a prepayment for the remaining aircraft and subsequent orders will be placed as customer expands its operations. Wen Chun has become our first authorised distributor in his China to obtain provincial level distribution qualifications and will establish a comprehensive sales network for our aircraft across Georgian province.

Speaker Change: total revenue in the second quarter were one hundred and two minillion representventeing as significant increase of nine hundred and nineteen point six percent year-over-year and a sixty five point three percent increase from prior quarter

Wang Zhao: To meet the continuous delivery of long-term bulk orders, we are also planning for the, future production capacity expansion. Based on the four-party strategic cooperation agreement we signed in Q1 this year with, the Management Committee of the Guangzhou Airport Economic Zone, the Administrative Committee of Guangzhou Economic and Technological Development District, and GAC, which is Guangzhou, Automobile Group. We further signed an MOU with GAC in June with the intent to establish a joint venture. This joint venture will leverage GAC's expertise and advantages in intelligent manufacturing, and automated production lines for electric vehicles to produce pilotless passenger-carrying aircraft in Guangzhou.

Wang Zhao: We look forward to this cooperation to further enhance our future production capacity, which, will allow us to respond to the market demand more quickly and lift the efficiency and scale of our product deliveries.

Wang Zhao: Delivery is merely the starting point, whether for Ehang or our customers. Equally important are the provisions of exceptional after-sales support, personnel training, site, planning, operational standards, and system development.

Wang Zhao: Our current customer service and business focus are both sales and operations, while, maintaining a steady stream of product deliveries and ensuring safe operations.

Wang Zhao: As a global pioneer of a pilotless e-vehicle provider, we are taking the responsibility, to explore commercial operations through collaborating closely with the regulatory authorities, customers, and partners to co-create a sustainable ecosystem that fosters the industry's growth and development.

Wang Zhao: With that, we are focusing on three key areas in which we have achieved significant progress.

Wang Zhao: The first one is talent cultivation. We have developed a customized vehicle aircraft personnel training program and assessment, system designed to equip our customers with a qualified operational team, ensuring safe operations.

Wang Zhao: Secondly, infrastructure development.

Wang Zhao: We not only actively participated in the formulation of China's first group standards for technical, requirements of e-vehicle vertiports, but also collaborated with local governments and customers to establish E-Hunt 216S vertiports and low-altitude urban mobility operation center demonstration projects in Guangzhou, Hefei, Shenzhen, Zhuhai, Taiyuan, Wencheng, and among other locations.

Speaker Change: the increase were primarary driven by higher sales vol of eh two one six serious products we deliver forty- nine ness of h two and six serious products in second quarter

Speaker Change: a significant growth for by units a year earlier and twotwenty-six units in first quarter two thousand and twenty-four

Speaker Change: gross margin remains consistently high as sixty -two point four percent in second quarter

Speaker Change: up two point two percentage point one sixty point two percent in second quarter two twenty-three and at zero point five percentage point increase from sixty one point nine percent in first quarter two and twenty four

Conor Yang: The increase were managed due to changes in revenue mix. Our high growth margin continued to underscore our competitive edge in the EVTO sector. In second quarter, our adjusted operating expenses, which are operating expenses excluding share based compensation expenses, were 70.6 million, up 21.6% from 58 million in second quarter of 2023, and up 29.6% from 54.5 million in the prior quarter. The increase was managed due to higher sales-related conversations, expansion of sales channels, and increased expenditures on different models of EVTO aircraft. Second quarter adjusted operating loss was 4.7 million, a notable 90.9% improvement from 51.3 million in second quarter of 2023, and a 62.9% improvement from 12.6 million in first quarter of 2024.

Wang Zhao: We also delivered the first batch of 10 units of EH-265F to Xi Shan tourism for low attitude tourism services in Taiyuan. In July, EH-265F completed its debut personal carrying flights in Taiyuan making a milestone for development of the low attitude economy in Shanxi province. This delivery is part of a 50 unit order from Xi Shan tourism that has been fully paid with the customer's plans to purchase an additional 450 units over the next two years. These units will be deployed in landmark scenic areas in Taiyuan and create a series of low attitude tourism demonstration products further advancing the construction of the low attitude economy demonstration area in Shanxi province.

Speaker Change: the increase were many due to changes in revenue mix

Speaker Change: our high court margin continued to underscore our competitive edge in the ebita sector

Speaker Change: in second quarter

Speaker Change: our adjusted operating expenses

Speaker Change: which are operating expenses excluding sharebased compversation expenses were seventey point six minutes up twenty one point six percent from fifty eight minilluteion in second quarter two and twenty three and up twenty nine point six percent from fifty four point five million in the prior quarter

Speaker Change: the increase was many due to higher sales-related conversations expansion of sales channel and increase expenditures on different models of ebitd aircrafts

Wang Zhao: These units will be deployed in landmark scenic areas in Taiyuan and create a series of low attitude tourism demonstration products further advancing the construction of the low attitude economy demonstration area in Shanxi province. Furthermore, in the second quarter, Ehang also delivered EH-265F to our customers in Guangdong, Hai Nan, Gidin, Miao Ning, and Japan.

Speaker Change: second quarter adjected operating loss was four point seven minutes a notable ninety point nnine percent improvement from fifty one point three mion in second quarter two and twenty-three

Wang Zhao: Furthermore, in the second quarter, Ehang also delivered EH-265F to our customers in Guangdong, Hai Nan, Gidin, Miao Ning, and Japan.

Speaker Change: and a sixty two point nine percent improvements from ttolve six minute in first quarter two twenty-fourth

Conor Yang: This quarter, we are proud to have achieved adjusted net income earlier than anticipated. A adjusted net income in second quarter was 1.2 million, compared to adjusted net loss of 51.8 million in second quarter of 2023, and a adjusted net loss of 10.1 million in first quarter of 2024. Thanks to our prudent cash management and improved credit controls, we have achieved positive cash flow from operations for the third consecutive quarter, adding strength to our balance sheet. At the end of second quarter, our cash Cash Equivalence, Short-Tem Deposit, the Restricted Short-Tem Deposit, and Short-Tem Investment Balances were 988.2 minutes.

Speaker Change: this quarter we are proud to have a chip a ched net income earlier than anticipated adjusted net income in second quarter was one point two menin

Wang Zhao: In July, we signed a sales and operation corporation agreement with Casey's modern mobility.

Wang Zhao: In July, we signed a sales and operation corporation agreement with Casey's modern mobility. As a subsidiary of Hong Kong's largest non-ventus bus operator, Khutong bus holding limited, Casey's modern mobility plans to purchase 30 units of EH-265F for development and operations in Hong Kong, Macau, and Hubei province further boosting market development in guilibe area and mainland China. Our company has received our 1000 units pre-orders for EH-265F evitals in China market. With the production capacity expansion, we expect to maintain a growing delivery trend in the third quarter.

Wang Zhao: As a subsidiary of Hong Kong's largest non-ventus bus operator, Khutong bus holding limited, Casey's modern mobility plans to purchase 30 units of EH-265F for development and operations in Hong Kong, Macau, and Hubei province further boosting market development in guilibe area and mainland China.

Speaker Change: compared to adjusted netloss of fifty-one point eight minill in second quarter two thousand and twenty-three

Speaker Change: an adjusted netloss of ten point one million in first quarter two twenty fourth

Speaker Change: thank to our prudent cash management and the improved credit controls we have a chip positive cash flow from operations for the third consecutive the quarter adding strength to our balance sheet at the end of second quarter our cash

Wang Zhao: Our company has received our 1000 units pre-orders for EH-265F evitals in China market.

Speaker Change: cash requivalance short-term deposit the refrigic shum deposit and shortter investment balances or nine hundred and eighty eight point two minutes

Wang Zhao: With the production capacity expansion, we expect to maintain a growing delivery trend in the third quarter.

Conor Yang: Additionally, we have raised more than US $76 million from the supermarket offering as of today. With the strengthened liquidity position and our confidence in future growing operating cash flow. We will not continue selling ADS under the app market offering in 2024. The process already raised will feel the next phase of our development and growth strategy, aforementioned by Mr. Hu, including R&D for next-generation evital technologies and products, team and product expansions, new headquarters in Guangzhou. Upcoming commercial operations and other business purposes. With the EH216-S, having secured three certificates and our OC applications accepted by CAC, we are world position to commence commercial operations, set in the stage for new phase of growth.

Wang Zhao: We anticipate the revenues of the third quarter will reach RMB 100 and 23 minutes, as we continue to receive more new orders. The increasing orders also mean a higher demand for production capacity. While ensuring that area requirements is delivery than that, we are also actively working with large, intelligent manufacturing enterprises, such as GAC, to establish a joint venture focused on production, upgrading to automated production lines. At the same time, we are expanding our useful factory to scale up our production, and establishing a new manufacturing base at E-Hung, East China regional headquarters in Hubei City, which will meet the growing delivery demands in the East China region.

Speaker Change: additionally we have raised more than u s seventy-six million doance from the at the market offering as of today

Speaker Change: with the strengthened liquidity position and our confidence in future growing operating cash flowle we will not continue sellting ads under the at the market offering in two and twenty-four

Wang Zhao: While ensuring that area requirements is delivery than that, we are also actively working with large, intelligent manufacturing enterprises, such as GAC, to establish a joint venture focused on production, upgrading to automated production lines.

Mr H: the process already raised will fill the next phase of our development and growth strategy of all mentioned by mr h ininclcurring r ind for next generation ebitital technologies and product

Wang Zhao: At the same time, we are expanding our useful factory to scale up our production, and establishing a new manufacturing base at E-Hung, East China regional headquarters in Hubei City, which will meet the growing delivery demands in the East China region.

Mr H: team and product expansions

Mr H: new headquarters in guangj

Mr H: upcoming commercial operations and other business purposes

Wang Zhao: Thirdly, Operational Standards and Certification. In July, the CAC accepted the Air Operator, Certificate, or OC, applications submitted by the Ehang General Aviation and Hefei Heyi Aviation.

Wang Zhao: As the world's first OC project for the pilotless passenger-carrying evital, aircraft, it is paving the way for the establishment of the world's first commercial operation standard for the pilotless passenger-carrying evitals.

Speaker Change: with a esh two one six stashas having secure three certificates and our oc abications accepttied by caac we are well positioned to commence commercial operations set in the stage for new phase of growth

Wang Zhao: We are fully committed to ensuring production and delivery while advancing commercial operation preparations providing customers with operation training and creating application demonstration projects. In terms of operation personnel training, we provide our customers with sufficient training courses after the delivery, including theoretical learning, aircraft safety operation, daily maintenance and emergency management and so on. To ensure that personnel are certified and on duty to ensure operation safety. This comprehensive training program ensures that our customers are capable of operating our evato aircraft in a proficient and compliant manner and providing safe-flight services to the public.

Wang Zhao: As an innovative technology company, we will not slow down our pace in R&D for new products and technologies while pushing forward with sales and operations.

Conor Yang: We expect total revenue for a third quarter of 2024 to be around 123 minutes, representing an increase of 329.8% year-of-year and 20.6% quarter-of-a-quarter. Having achieved positive operating cash flow for the third consecutive quarter and adjusted net income in the second quarter, we are confident that this upward trend will continue and ultimately lead to a full-year positive cash flow in 2024 and for several adjusted net incomes in 2025.

Speaker Change: we expect total revenue for the third quarter of two and twenty four to be around one hundred and twenty- three minillute representing an increase of three hundred and twenty nine point eight percent year-over-year and twenty point six percent quarter over quarters

Speaker Change: having a cheirred pive upwriting cash f

Wang Zhao: To ensure that personnel are certified and on duty to ensure operation safety.

Speaker Change: for the third consecutive quarter and

Speaker Change: justit net income in second quarter

Wang Zhao: This comprehensive training program ensures that our customers are capable of operating our evato aircraft in a proficient and compliant manner and providing safe-flight services to the public.

Speaker Change: we are commupant

Speaker Change: that this upward trend will continue and ultimately led to full year positive cash flow in two and twenty four and foreseeable adjusted net income in two thousand and twenty-five

Conor Yang: That concludes our prepared remarks.

Operator: Let's now open the call for questions. Operator, please go ahead. Thank you, dear participants. As it reminded, if you wish to ask a question over the phone, please press star 111 on your telephone keypad and wait for a name to be announced. To withdraw a question, please press star 111 again. Please, then, Bob will compile the questionnaire list of these.

Wang Zhao: At the same time, we also plan to cooperate with domestic aviation colleges and professional institutions to carry out personnel training and jointly establish systems for academy education, licensed management and so on. For the industry's future last scale, standardized and professional operations, our joint training program with the Civil Aviation Select University of China is now in the state of curriculum design. On the operational infrastructure front, Yihang collaborates closely by providing technical requirements and design solutions while the infrastructure construction is managed by local governments and our customers.

Speaker Change: not come trth our prepared remarks mustus now open the call for questions operator please go head

Speaker Change: thank you the participants as a reminder if you wish to ask a question over the phone please pstile one one on the tel phone key part and wait for name to be announced to withdrawa question please pressstar one one again with the babiweble compare the k narrow studies who take a few moments

Wang Zhao: For the industry's future last scale, standardized and professional operations, our joint training program with the Civil Aviation Select University of China is now in the state of curriculum design.

Ting Song: We'll take a few moments, and now we're going to take the first question, and it comes from the land of Loret Li from Deutsche Bankerland. It will proceed after question. Thank you for taking my question, and congratulations on the strong quarter. My first question is thinking about the timeline of commercial operation to oversee markets. When would you expect to start that? Is that like 2025 realistic?

Wang Zhao: On the operational infrastructure front, Yihang collaborates closely by providing technical requirements and design solutions while the infrastructure construction is managed by local governments and our customers.

Speaker Change: and thatwe'll going to take a a first question

Laura Leaf: and it comes from land of laura leaf from dosha banjan is oply after question

Laura Leaf: thank you for taking my question and the congratulations on the strong quarter

Wang Zhao: Operation size in key locations have been launched, including Xinjun OHB, Hefei Luo Gang Central Park, Guangzhou-Juolong Lake, Zhu Hai-Tangja Port, and Wencheng Landing Lake. Each of these sizes is equipped with facilities including dedicated water ports for EH-216S, hangers and the personnel service areas. In addition, many local governments are planning to build operation networks for future air mobility. For example, Xinjun Park is set up a thousand of low-attitude take-off and landing platforms and Guangzhou-Panthu Invest are being 10 billion into low-attitude infrastructure.

Laura Leaf: so my first question is thinking about

Laura Leaf: atthe timeline of commercial operation to overse markets would we expect to like start that is like two and twenty-five realistic

Laura Leaf: i

Wang Zhao: Hello, I'm back to this question. Thank you. Here's the English translation. We've been actively extending our plugins in the international market. The study in commercial operations in overseas countries depends on getting the local regulatory approvals and the certification. Right now, Ehang is working with CAC in advancing bilateral worthness agreement for the validation of the certificate for BTC of the UN216S with other countries' aviation authorities such as UAE, Brazil, Indonesia, and Thailand, etc. The timeline depends on the local regulatory schedule and the progress. And throughout the process, Ehang will actively cooperate and provide a required document to push forward the process.

Wang Zhao: In addition, many local governments are planning to build operation networks for future air mobility.

Speaker Change: great what i without do twenty

Speaker Change: how should shall show me you that gudes don't however assigning im a chancech shop for ther down the ro jua suua than jun

Wang Zhao: For example, Xinjun Park is set up a thousand of low-attitude take-off and landing platforms and Guangzhou-Panthu Invest are being 10 billion into low-attitude infrastructure.

Speaker Change: which i want mherees or do me how you use the 't your pass in the type bo ora prin j hio io itis a

Wang Zhao: This will include over a hundred revenues, verticals and hundreds of community landing paths.

Wang Zhao: This will include over a hundred revenues, verticals and hundreds of community landing paths. Our EH-216S is ideally suited for future urban air transportation. It's compact, lightweight, can fly autonomously, easy to manage fleets and cost effective. In May, we will actively involve in shaping China's first group standard for equator water ports. This will set a state for future industry standards. Not only all water ports built in accordance with this standard will be able to accommodate EH-216S.

Speaker Change: should you should jo you co were jal farmer some jingu so if that you go go from drong y you depeds have been to count from which fam offsho m motion of hallo in enging the pitchion

Wang Zhao: Our EH-216S is ideally suited for future urban air transportation. It's compact, lightweight, can fly autonomously, easy to manage fleets and cost effective.

Speaker Change: that's addressciia how ms a high rather number don'tdon't either bojosh young jobho

Speaker Change: p banunfrom down to the suation issutrava should head work or job are social onthe you found major gohome fam only the aler in senor home she agenti way withis the send how youful

Speaker Change: here's the english translation will been actively extending our pregnants in the international market

Wang Zhao: In terms of operations standards and certification, as Mr. Hu mentioned in July, the CAAC accepted the air operator certificate or OC applications by two operators.

Wang Zhao: In terms of operations standards and certification, as Mr. Hu mentioned in July, the CAAC accepted the air operator certificate or OC applications by two operators. One is Yihang General Aviation, our subsidiary for UAM operations. The other is He Yi Aviation, our operation joint venture in Hefei. The CAAC has finished reviewing of her e-aviation application documents and is about to conduct on-set inspection soon. The first OC for packetless passenger carrying evato is expected to receive within this year, allowing the operator to launch commercial operations with EH-16S. Afterwards, we will have more customers and partners in applying OC with our accumulated experience and established safety standards. This will also help expanding our operation network.

Speaker Change: but studying commercial operations see over these countries depends on getting the local regulatory approval and the communations

Wang Zhao: One is Yihang General Aviation, our subsidiary for UAM operations.

Speaker Change: right now e this working with c in the evancing bilateral our worage agreement for the validation of taxificate or vtc of the eh one success with other countries deviational authorities

Wang Zhao: The other is He Yi Aviation, our operation joint venture in Hefei.

Wang Zhao: The CAAC has finished reviewing of her e-aviation application documents and is about to conduct on-set inspection soon.

Speaker Change: such has e brazil in theonesia and thailand etceal

Wang Zhao: The first OC for packetless passenger carrying evato is expected to receive within this year, allowing the operator to launch commercial operations with EH-16S.

Speaker Change: the timeline depends on the local regulators schedule and the progress and through outare the process how will actively coroporate and provide the required documents to push forward the process

Wang Zhao: And besides, we have already made a few deliveries to overseas markets like the Middle East and Indonesia and conducted the demo flights there. And this helps us not only to extend the market to educate the public, but also to enhance the communication with local authorities for their recognition of our aircraft and our aircraft's safety features, heading the way for the BTC's education.

Wang Zhao: Afterwards, we will have more customers and partners in applying OC with our accumulated experience and established safety standards. This will also help expanding our operation network.

Speaker Change: and besides we have already made a few deliveries overti market let the mies and the indonesia

Speaker Change: and they're conducted the democrsright there

Speaker Change: and this helped us not only to expend in the market

Wang Zhao: In July, we also formed a strategy partnership with China-1000 General Aviation, a leading General Aviation Service Provider under the China-1000 airline group.

Wang Zhao: In July, we also formed a strategy partnership with China-1000 General Aviation, a leading General Aviation Service Provider under the China-1000 airline group. Together, we are planning to introduce a range of services, including evato terrorism, cross island flights, and cargo transportation at Zhuhai Airport, chimelong ocean kingdom, and surrounding islands.

Speaker Change: to adeducate the public but also to enhance the communication with local authorities for the recommendation of our aircraft and our aircrafttersettiive features having the way or the v eas cerification

Ting Song: Thank you.

Wang Zhao: Together, we are planning to introduce a range of services, including evato terrorism, cross island flights, and cargo transportation at Zhuhai Airport, chimelong ocean kingdom, and surrounding islands.

Ting Song: Okay, thank you so much. Appreciate it, the color.

Speaker Change: thank you

Ting Song: And my second question is, as we get really impressive growth margins of over 60%. Just trying to understand what percentage of our supply chain actually would we share or overlap with the E.V. order control and business?

Speaker Change: you thank you so much appreciated the callor

Speaker Change: and my second question is i think we get really impicly girls margin those over that sixty percent just trying to understand what percentage of our supply chain agurity what we share or overlapab with the evv order rool and

Wang Zhao: Moreover, we are thrilled to see several local governments including those in Xinjiang, Guangzhou, Hubei, and Zhuhai are offering direct subsidies for evato commercial routes. These subsidies range from R&B 100 to 300 per passenger to flight, providing robust support for evato service operators.

Wang Zhao: Okay, both of our procurement are from China or Mexico, with some electric components or chips imported from overseas.

Speaker Change: business

Speaker Change: okay most of our procuremen from china domatic with some electic supponus or a chip important form overiously

Wang Zhao: And battery design depends on the E.V. heart. So we design our own battery as well as we design our own intermotors, and we outsource to the players in China.

Wang Zhao: In the international market, we continue to expand into the Middle East market in the second quarter.

Speaker Change #100: and battery design than the be heart the we design own battery as well as we designire our own electr motor and we outsortced to

Wang Zhao: In April, we reached a strategy cooperation with the U.S, investment office and multi-level group. They will support our development in the UAE and the Middle East region.

Wang Zhao: In April, we reached a strategy cooperation with the U.S, investment office and multi-level group. They will support our development in the UAE and the Middle East region. In May and June, our EH-16S completed the build flights in UAE and Saudi Arabia. Just in, our evato footprint has expanded to 16 countries worldwide.

Wang Zhao: And so in general, there are certain portion overlapping with the E.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C.C Thank you.

Speaker Change #101: the playliers in china and so in general that there are certain ption overlaping with the ec mostly occupent many pressureres on the

Wang Zhao: In May and June, our EH-16S completed the build flights in UAE and Saudi Arabia.

Wang Zhao: Just in, our evato footprint has expanded to 16 countries worldwide.

Speaker Change #102: a lot of would be with may be feel useless of the aircraf so for most part of we produce and we assembly in our bly beautiful factory so far

Wang Zhao: In the third quarter, we will continue to expand our business in overseas markets, such as Africa, the Middle East, Central America, and Europe.

Wang Zhao: In the third quarter, we will continue to expand our business in overseas markets, such as Africa, the Middle East, Central America, and Europe. Looking ahead, we will focus on executing our business strategy on sales and operations and delivering results consistently. Our goal is to play a key role in commercializing China's low-attitude economy and global UNM industry, with 50 as our top priority.

Wang Zhao: Okay. Yeah. Thank you. Yeah.

Wang Zhao: Thank you for the color. Yeah.

Wang Zhao: Congratulations. Again.

Speaker Change #103: thank you okay yeah i think yeah thank you for a color conressatulations gangled to that the record deliies thank you

Wang Zhao: Hold the direct card delivery.

Wang Zhao: Looking ahead, we will focus on executing our business strategy on sales and operations and delivering results consistently.

Operator: Now we're going to take up the next question.

Speaker Change #103: thank you thank you

Ting Song: And the next question comes from Lan of Ting Song from Goldman Sachs. Your Lan is open. Please ask the question.

Wang Zhao: Our goal is to play a key role in commercializing China's low-attitude economy and global UNM industry, with 50 as our top priority.

Speaker Change #104: now we're going take up the next question

Speaker Change #105: and the next question comes to line of things song from goldman saxyour line is open please after a question

Ting Song: Hi. Thank you for taking my question. So I will get together.

Ting Song: My first question is about the progress of Ehang obtaining the TC of ET30. As we see that the ET30 and EH216s are in different sizes and features. So what are the key challenges of ET30 where you develop to compare to the EH216?

Speaker Change #106: hi thank you for taking my question so i will not get together

Conor Yang: Next, I will turn the call over to our CFO Conor Yang on financial performance.

Conor Yang: Next, I will turn the call over to our CFO Conor Yang on financial performance. Thanks. Thank you, Mr. Wang.

Speaker Change #107: the first classy is a prody progress of e obtaining tc of three and thirty as we see that the ley thirty and e two two one six is i in different sign features

Conor Yang: Thanks.

Conor Yang: Thank you, Mr. Wang.

Conor Yang: Hello, everyone.

Conor Yang: Hello, everyone. This is Conor. Before I dive into details, please note that all numbers presented are in R&B and are for a second quarter of 2024. Unless stated otherwise, detail analysis are available in our early press release on our IR website. I am pleased to report that our continued diligent execution has led to another quarter of exceptional financial results in second quarter of 2024. We stated our review guidance by over 13%, a chief adjusted net income and have generated positive operating cash roll for three consecutive quarters. Notably, our OC application has been formally accepted by CAC, marking a significant step closer to commercial operations and accelerated growth.

Conor Yang: This is Conor.

Conor Yang: Before I dive into details, please note that all numbers presented are in R&B and are for a second quarter of 2024.

Speaker Change #108: so what are the key challenges of weakis thirty way we to compare to the each two one six

Ting Song: And my second question is on the R&D spending. So what's the expectation of R&D in the next three years? And what would be your key focus on the R&D investment? Will you send more on the new model or the enhancement of the existing model?

Conor Yang: Unless stated otherwise, detail analysis are available in our early press release on our IR website.

Speaker Change #109: in my second questionassure is on the hind the than day so what expectation of ir these spend day next three years and what would be your ky focus on the in the investment will use and more on the new model or the enhancement of the existing model thank you

Conor Yang: I am pleased to report that our continued diligent execution has led to another quarter of exceptional financial results in second quarter of 2024. We stated our review guidance by over 13%, a chief adjusted net income and have generated positive operating cash roll for three consecutive quarters. Notably, our OC application has been formally accepted by CAC, marking a significant step closer to commercial operations and accelerated growth. Now, let's dive into details of our second quarter results.

Ting Song: Thank you.

wasp: thank you wasp

Speaker Change #111: will'll have but i you

Speaker Change #112: what about under j ab be in the into the digital tr chang for easy in the transition jusions your haers are basing soon who ble bably whole waing question buks sh hunction thing

Wang Zhao: I will answer the first question. Thank you. This is the English translation. Leveraging the BD30 prototype, our R&D team is currently redesigning and upgrading our lease and crew's unit model for enhancing the buy performance. And we will keep you updated on this. And we will also submit the TCFB patient for our lease and the crew's model once it's released. And since the EH216s now has three required certificates. So our main focus is on its sales and operations. And the EH216s is perfect for the air transportation within the cities because it's compact and does not need large take-off and ending areas.

Speaker Change #113: now my warma yes are to the efficiencies in junct sentence teitu

Speaker Change #113: so it since ger i show for you in the ter to ira are your your life

Conor Yang: Total revenue in second quarter were 102 minutes representing a significant increase of 919.6% year of a year and a 65.3% increase from prior quarter. The increase were primarily driven by higher sales volume of EH216 serious products. We delivered 49 units of EH216 serious products in second quarter, a significant growth from 5 units a year earlier and 26 units in first quarter of 2024. Growth margin remains consistently high at 62.4% in second quarter, up to 2.2% percentage point from 60.2% in second quarter of 2023, and a 0.5% percentage point increase from 61.9% in first quarter of 2024.

Speaker Change #114: this's p out how the mobwar year will shoe that and that don't fit on sugar that remain won't putting

Speaker Change #115: in father of with his soning later for efficiencies should con have been to

Wang Zhao: Building on the VT-30 prototype, we have conducted a comprehensive redesign and technological upgrade of our lift-and-cruise evital model, aiming to achieve more exceptional flight performance.

Wang Zhao: We will be releasing this soon, so please stay tuned for the exciting news.

Wang Zhao: We are also continuously optimizing the performance of our Ehang 216S. In the critical areas of battery technology, we are developing next-generation evital battery solutions that meet the 4H standards, which means high energy density, high cycle life, high instantaneous charge-discharge rate, and high safety. For example, in April, we partnered with Greater Bay Technology, a battery provider incubated by Guangzhou Automobile Group, for the research and development of the world's first ultra-fast charging, battery solutions for evitals. This is expected to significantly improve the evital operational efficiency and meet the demands of the large-scale, high-frequency UAM operations.

Speaker Change #115: so chong from should drumam away trg again the ja search

Wang Zhao: Furthermore, we are also testing the solid-state lithium battery cells developed in collaboration with INX.

Speaker Change #116: the ambush ta i you theam busshe her suni conone these just

Speaker Change #117: ofthis is the english suffation

Speaker Change #118: leveraging the b thirty prototypes our r dte is countryway resigning and upgrading our lease and crdbit model we re enhancing the by performance

Conor Yang: Growth margin remains consistently high at 62.4% in second quarter, up to 2.2% percentage point from 60.2% in second quarter of 2023, and a 0.5% percentage point increase from 61.9% in first quarter of 2024. The increase were managed due to changes in revenue mix. Our high growth margin continued to underscore our competitive edge in the EVTO sector. In second quarter, our adjusted operating expenses, which are operating expenses excluding share based compensation expenses, were 70.6 million, up 21.6% from 58 million in second quarter of 2023, and up 29.6% from 54.5 million in the prior quarter.

Speaker Change #119: and will you keep you updated downthis and we will also the me the tcapplicients or our beat in a crumoile once is released

Speaker Change #119: and since the hundred and sixteen f now has sway with i to thirty paid

Speaker Change #120: so our main focus is ongu both and our patients

Conor Yang: The increase were managed due to changes in revenue mix.

Speaker Change #121: and the handus success is perfect for the air transportation within the c because these compact and does not need large take of amending areas

Conor Yang: Our high growth margin continued to underscore our competitive edge in the EVTO sector.

Wang Zhao: While the BD30 series lease and crew's model is meant to complement our current product portfolio and usage. And it is designed specifically for intercity air transportation. It's a nodule replacement for the EH216s. That is suitable for the air taxi uses within the urban area.

Conor Yang: In second quarter, our adjusted operating expenses, which are operating expenses excluding share based compensation expenses, were 70.6 million, up 21.6% from 58 million in second quarter of 2023, and up 29.6% from 54.5 million in the prior quarter. The increase was managed due to higher sales related conversations, expansion of sales channels, and increased expenditures on different models of EVTO aircraft.

Speaker Change #122: while the very thirty serious recent cruise model is meant to complement our current product portfolio and usecases

Speaker Change #122: and it is designed specifically for intercity airspation as a nota replacement for the handto us six as that is still to for the air cap uses within the urban area

Conor Yang: The increase was managed due to higher sales related conversations, expansion of sales channels, and increased expenditures on different models of EVTO aircraft. Second quarter adjusted operating loss was 4.7 million, a notable 90.9% improvement from 51.3 million in second quarter of 2023, and a 62.9% improvement from 12.6 million in first quarter of 2024.

Conor Yang: Thank you. Okay.

Conor Yang: This is Connor. I will answer the second question regarding R&D. On the second quarter, R&D expenses about adjusted total arpeggs for the BD60. So going forward, we expect him that the R&D expenses will be around 45 to 50% of our total ups, and we are committed to our R&D development. And for example, if you compare the number of first quarter ID expenses, actually we have improved about 42% with R&D expenses for the first quarter. And our future R&D efforts will focus on optimizing the EH-216 performance improvement and developing the long-haul EBITOs and other aircraft for both passenger carry as well as today.

Wang Zhao: Meanwhile, we are also continuously researching and developing new technologies and solutions, for core components, such as electric motors, propellers, and materials, iterating and upgrading them to achieve sustained improvements.

Wang Zhao: We have also cooperated with more high-quality suppliers, such as Zhuhai Empower Electric Company, a leading EV powertrain provider into our system.

Connor: you again this is connor sort of second question regarding r indeed on the second quarter r in the expenses about adjusted though operat fi this

Wang Zhao: This not only enhances the flight performance of our aircraft, but also helps to strengthen the stability of our supply chain and support our industrial layout.

Wang Zhao: Also, our newly upgraded R&D laboratories are nearing completion at our new headquarters, designed to support the development and testing of new technologies and components, such as batteries and electric motors.

Wang Zhao: I'm also delighted to share with you that our new headquarters and supporting facilities, located on the banks of the Pearl River in Guangzhou Huangpu District, are currently under construction.

Wang Zhao: This complex will feature a state-of-the-art exhibition center, a brand-new command and control center, and a futuristic office space.

Wang Zhao: Furthermore, we will integrate with the surrounding communities and commercial complexes to launch, aero sightseeing and transportation routes with our evitals, connecting ground, air and water transportation, and creating a new urban landmark, Ehang Future City, as well as a, UAM demonstration area for low-altitude economy in the Greater Bay Area.

Wang Zhao: As we celebrate Ehang's 10th anniversary, we reflect on our journey from humble beginnings, to becoming a global trailblazer and a leader in the UAM industry. Throughout, we have remained steadfast in our commitment to exploring pilotless passenger-carrying, aircraft and its applications, driving innovations in technologies, concepts, and standards. From pioneering the world's first pilotless passenger-carrying evital prototype to achieving, the safe and reliable flights of pilotless evitals, from the absence of industry standards to establishing and shipping them, and subsequently obtaining the world's first type certificate, production certificate, and standard airworthiness certificate, we have consistently pushed boundaries from zero to one through innovations and perseverance, contributing to shaping this urban air mobility industry.

Wang Zhao: Today, our years of hard work and dedication have led to strong and stable financial performance, and a long-term growth trajectory.

Conor Yang: Second quarter adjusted operating loss was 4.7 million, a notable 90.9% improvement from 51.3 million in second quarter of 2023, and a 62.9% improvement from 12.6 million in first quarter of 2024.

Wang Zhao: With our passion and respect for the aviation industry, we will continue to drive forward, into the next exciting phase of commercial operations, creating greater value for our stakeholders, supporters, and shareholders.

Wang Zhao: Next, let me turn it over to our COO, Mr. Wang, to elaborate on our Q2 operational performance.

Speaker Change #124: so going forward we expect him that there are the expenses will be around only by to fifty percent of our total upx and we are committed to our i development

Wang Zhao: Thank you.

Conor Yang: This quarter, we are proud to have achieved adjusted net income, earlier than anticipated. A adjusted net income in second quarter was 1.2 million, compared to adjusted net loss of 51.8 million in second quarter of 2023, and a adjusted net loss of 10.1 million in first quarter of 2024. Thanks to our prudent cash management and improved credit controls, we have achieved positive cash flow from operations for the third consecutive quarter, adding strength to our balance sheet.

Speaker Change #125: and presimmer you you compare the number of first quarter i the expensive actually we have improved increased the mabout forty two percent

Speaker Change #125: we time the expensive from first quarter

Speaker Change #126: and our future and the efforts were focused on optanizing the phh two and sex performance the human and develop in the nor ho ebitgo and other airpress but both passenger carry as wellas

Conor Yang: Thanks to our prudent cash management and improved credit controls, we have achieved positive cash flow from operations for the third consecutive quarter, adding strength to our balance sheet.

Conor Yang: And that will include expenses on the R&D materials and our R&D gene expansion, test length, and every certificate certification expense. We can say that we believe our growth rate of revenue will be year over year will be a lot higher than overall R&D.

Speaker Change #127: and that will crude expenses on the rd materials and are r in the team expansion testf and everywas that a certificate cerification expted

Conor Yang: At the end of second quarter, our cash Cash Equivalence, Short-Tem Deposit, the Restricted Short-Tem Deposit, and Short-Tem Investment Balances were 988.2 minutes.

Conor Yang: At the end of second quarter, our cash Cash Equivalence, Short-Tem Deposit, the Restricted Short-Tem Deposit, and Short-Tem Investment Balances were 988.2 minutes. Additionally, we have raised more than US $76 million from the supermarket offering as of today. With the strengthened liquidity position and our confidence in future growing operating cash flow. We will not continue selling ADS under the app market offering in 2024. The process already raised will feel the next phase of our development and growth strategy, aforementioned by Mr. Hu, including R&D for next-generation evital technologies and products, team and product expansions, new headquarters in Guangzhou.

Speaker Change #128: that we believe our gross rate of our revenue will be year-over-year will be a lot higher than overall upset

Conor Yang: So even though we continue to increase our R&D expenses, our R&D expenses, the R&D expenses and the presentation of the revenue will continue to drop in the coming years.

Speaker Change #128: so even though we continue to increase our d expenses in the mind the expensive expercentage of the revenue will continue to dropus in in the coming years thank you

Conor Yang: Additionally, we have raised more than US $76 million from the supermarket offering as of today.

Sinti Huang: Thank you. Now we're going to take over the next question. And the next question comes to the land of Sinti Juan from Morgan Stanley. Your land is open. Please ask a question. Thanks for taking my question, and congratulations on remarkable to your results. My first question is regarding your order backlog. I see E-Hon has met significant progress in secure new orders. Could you give us a quick update on how many purchase orders we have on hand, and when they will be delivered? And also, could we have a wrap-up idea on geographic mix in terms of the order backlog?

Wang Zhao: Thank you, Mr. Hu, and hello, everyone.

Wang Zhao: Since securing the production certificate in April, we have been authorized for mass, production of our EH216S and secure standard airworthiness certificates for each aircraft that we have delivered. Our sales and deliveries continue to grow. In the second quarter, we delivered 49 units of EH216S, generating revenue of RMB102 million, representing a year-over-year increase of over nine times and a quarter-over-quarter increase of 65 percent.

Conor Yang: With the strengthened liquidity position and our confidence in future growing operating cash flow.

Wang Zhao: Let me highlight some key examples of customers and partnerships.

Wang Zhao: In June, we partnered with Wencheng, Zhejiang Province, and received a purchase order with, an additional purchase plan for up to 300 units of EH216S. We have already delivered a first batch of 27 units in the second quarter and conducted, the debut flight at a local scenic area in Wencheng. The customer also made a prepayment for the remaining aircraft and subsequent orders will be placed as the customer expands its operations.

Wang Zhao: Wencheng has become our first authorized distributor in East China to obtain provincial-level distribution qualifications and will establish a comprehensive sales network for our aircraft across Zhejiang province.

Wang Zhao: We also delivered the first batch of Chen units of EH216F to Xishan Tourism for low altitude tourism services in Taiyuan. In July, EH216F completed its debut passenger carrying flights in Taiyuan, making a milestone for development of the low-altitude economy in Shanxi province. This delivery is part of a 50-unit order from Xishan Tourism that has been fully paid, with the customer plans to purchase an additional 450 units over the next two years. These units will be deployed in landmark scenic areas in Taiyuan and create a series of low-altitude tourism demonstration products, further advancing the construction of the low-altitude economy demonstration area in Shanxi province.

Speaker Change #129: thank you

Wang Zhao: Furthermore, in the second quarter, Yihang also delivered EH216F to our customers in Guangdong, Hainan, Jilin, Liaoning, and Japan.

Conor Yang: We will not continue selling ADS under the app market offering in 2024.

Wang Zhao: In July, we signed a sales and operations cooperation agreement with KC Smart Mobility, a subsidiary of Hong Kong's largest non-rented bus operator, Kuchung Bus Holding Ltd. KC Smart Mobility plans to purchase 30 units of EH216F for development and operations in Hong Kong, Macau, and Hubei province, further boosting market development in Great Bay area and mainland China.

Speaker Change #130: now we're going take up the next question

Speaker Change #131: and the next question comes to land of cnian for morganstandard your line is open please ask a question

Conor Yang: The process already raised will feel the next phase of our development and growth strategy, aforementioned by Mr. Hu, including R&D for next-generation evital technologies and products, team and product expansions, new headquarters in Guangzhou.

Speaker Change #132: thanks for picking my question and converulations on remarkable to cure results

Speaker Change #133: my first question is regarding your order backlog i think i see han has met a significant progressing securing new orders

Speaker Change #134: could you give us a quick update and how many purchase oders we have on hand and when they will be delivered and also could we have a rob idea on geographic mix in terms of the older backologg so that's my first question

Conor Yang: Upcoming commercial operations and other business purposes. With the EH216-S, having secured three certificates and our OC applications accepted by CAC, we are world position to commence commercial operations set in the stage for new phase of growth.

Sinti Huang: So that's my first question. Thank you.

Speaker Change #135: not ch mahere which woman what had him done isyou travel or eachchchanganyy by j people lasaniaand they candu coholder ry show you will hyrogenda i was suther go and jgo ppe o

Conor Yang: We expect total revenue for a third quarter of 2024 to be around 123 minutes, representing an increase of 329.8% year-of-year and 20.6% quarter-of-a-quarter.

Conor Yang: We expect total revenue for a third quarter of 2024 to be around 123 minutes, representing an increase of 329.8% year-of-year and 20.6% quarter-of-a-quarter. Having achieved positive operating cash flow for the third consecutive quarter and adjusted net income in second quarter, we are confident that this upward trend will continue and ultimately led to a full-year positive cash flow in 2024 and for several adjusted net income in 2025.

Speaker Change #136: socially hi o in the cood in that demand which junk job for cho away parxy some dr

Speaker Change #136: so you charge that the roagenda in aabona jacka jo sdo jok bote and jok bother to ya in dunpe

Conor Yang: Having achieved positive operating cash flow for the third consecutive quarter and adjusted net income in second quarter, we are confident that this upward trend will continue and ultimately led to a full-year positive cash flow in 2024 and for several adjusted net income in 2025.

Speaker Change #136: ginia the seven unction junu that in am a against yousince in haum alize es are and eng jun bo ty well i jookate barying then the ginia flled up when they comees to the de socisure soienting nana a

Wang Zhao: Our company has received over 1,000 units pre-orders for the EH216F evitals in China market.

Speaker Change #137: currently our artder and the produdos hasatch over one thousand and one hundred units in china market

Conor Yang: That concludes our prepared remarks.

Wang Zhao: The next question comes to the end of the day. In the next phase, our focus will be on extending production facilities, accelerating the deliveries of our existing auto-preply and the new orders. And for this year, we will also help our customers to apply OC, setting up a demonstration project in pioneer cities to exemplify evital operations. And in the future, we aim to replicate this operational site and share our experience in more locations in the country. To add on your question of distribution on the geographic mix, the orders, if you recall that the codes called the last year and as well as the first code of this year, our order's revenue contribute around 20 to 25 percent of our total revenue.

Operator: Let's now open the call for questions.

Operator: Operator, please go ahead.

Operator: Please, then, Bob will compile the questionnaire list of these.

Speaker Change #138: we pend to deliver this that backshees over the next one to three years for customers request and their business development and the pace of their pracing orders

Operator: Thank you, dear participants.

Operator: As it reminded, if you wish to ask a question over the phone, please press star 111 on your telephone keypad and wait for a name to be announced.

Wang Zhao: With the production capacity expansion, we expect to maintain a growing delivery trend in the third quarter.

Speaker Change #139: we're getting more and more new customers than orders so we expect deliveries to keep growing

Wang Zhao: We anticipate the revenues of the third quarter will reach RMB123 million as we continue to receive more new orders. The increasing orders also mean a higher demand for production capacity.

Operator: To withdraw a question, please press star 111 again.

Wang Zhao: While ensuring that every aircraft meets delivery standards, we are also actively working with large intelligent manufacturing enterprises such as GAC to establish a joint venture focused on production upgrading to automated production lines.

Wang Zhao: At the same time, we are expanding our Yunfu factory to scale up our production and establishing a new manufacturing base at Yihang, East China Regional Headquarters in Hefei city, which will meet the growing delivery demands in the East China region.

Wang Zhao: We are fully committed to ensuring production and delivery while advancing commercial operation, preparations, providing customers with operation training, and creating application demonstration projects. In terms of operation personnel training, we provide our customers with sufficient training, courses after the delivery, including theoretical learning, aircraft safety operation, daily maintenance, and emergency management, and so on, to ensure that personnel are satisfied and on duty to ensure operation safety. This comprehensive training program ensures that our customers are capable of operating, aircraft in a proficient and compliant manner and providing safe flight services to the public.

Operator: Please, then, Bob will compile the questionnaire list of these.

Wang Zhao: At the same time, we also plan to cooperate with domestic aviation colleges and professional, institutions to carry out personnel training and jointly establish systems for academy education, license management, and so on.

Wang Zhao: For the industry's future large-scale standardized and professional operations, our joint training, program with the Civil Aviation Flight University of China is now in a state of curriculum design.

Ting Song: We'll take a few moments and now we're going to take the first question and it comes from the land of Loret Li from Deutsche Bankerland.

Ting Song: We'll take a few moments and now we're going to take the first question and it comes from the land of Loret Li from Deutsche Bankerland. It will proceed after question.

Speaker Change #139: in the next phase our focus will be on tandending production facilities accelerating the deliverage of our existing auto ppeline and the new orders

Speaker Change #139: and for this year we will also help our customers to apply oc that in our demonstration projecting paneer cities to exemplify ebita operations

Ting Song: It will proceed after question.

Wang Zhao: Thank you for taking my question and congratulations on the strong quarter. My first question is thinking about the timeline of commercial operation to oversee markets. When would you expect to start that? Is that like 2025 realistic?

Speaker Change #139: and the interfutualure we aim to replicate this operational d and the share our experience inimmore location

Ting Song: Thank you for taking my question and congratulations on the strong quarter.

Speaker Change #139: she

Ting Song: My first question is thinking about the timeline of commercial operation to oversee markets.

Speaker Change #140: to add on your questionable distribution on the geographic mix

Ting Song: When would you expect to start that?

Speaker Change #141: the holders if you recall that the fourth quarter last year and as well as the first quar of this year are obviously over over revenue countrybute twent and twenty five percent of photal revenue

Wang Zhao: But since the TRT government is promoting no other day, we are seeing a very rapid growth from an appetite high. So we expect, in terms of geographic mix, that will be 90 percent from China for this year and next. And the percentage of the overseas revenue will decrease from last year, even though the international demand is still quite strong. Thank you. Thank you, that's pretty comprehensive.

Speaker Change #142: but since the pic government has promoting no other ly sort of seeing a very rapid growth on a havebig high so we expect him that in terms of geographic the mix that

Ting Song: Is that like 2025 realistic?

Speaker Change #143: will be ninety percent from china it this year next and the percentage of the overly revenue were decrease last year even though the international demands still quite strong

Speaker Change #144: thank you

Wang Zhao: And my second question is regarding growth margin. So, how should we think about the growth margin over time, especially after we take off commercial operations? Right, of course, margin. Right now, we are the only company that can provide a product or commercialization. Therefore, we have the pricing power. Even though as we scale up, we will have a leveraging in terms of our procurement. But on the other side, we continue to improve certain features of our 26. So, now that after we get the TC, we still maintain the 26 percent part of the growth margin. That's the concentrating version.

Ting Song: Hello, I'm back to this question.

Speaker Change #145: thank you that's pretty comprehensive and my second question is' regarding gross margin how should we think about the g margin over time specially after we kick off commercial operations

Speaker Change #146: right a coursest margin right now we are the only

Speaker Change #147: company came by product or commercializations therefore we have the pricing power even though as we stillill up we will have a like a leagingin terms of our procurement from the other side will continue to improve

Ting Song: Thank you.

Wang Zhao: Hello, I'm back to this question. Thank you. Here's the English translation. We've been actively extending our plugins in the international market. The study in commercial operations in overseas countries depends on the getting the local regulatory approvals and the certification. Right now, Ehang is working with CAC in advancing bilateral worthness agreement for the validation of the certificate for BTC of the UN216S with other countries' aviation authorities such as UAE, Brazil, Indonesia, and Thailand, etc.

Ting Song: Here's the English translation.

Speaker Change #148: seven pieures of our two and six so then that abutewe get the tc was still enoplysix

Wang Zhao: In terms of the overall name margin, we have achieved just a couple of our second quarter. And as we have seen, that's very, very strong revenue growth. So, we're expecting with the revenue growth rapidly, margin will continue to improve in many years to come.

Speaker Change #148: per cent pth gross margin that be very important in terms of the overall lim margin we have a ship adjusted than coming on our second quarter

Speaker Change #149: and as we have seen that the very very strong er revenue growth so we are expecting

Wang Zhao: The timeline depends on the local regulatory schedule and the progress. And throughout the process, Ehang will actively cooperate and provide a required document to push forward the process. And besides, we have already made a few deliveries to overseas markets like the Middle East and Indonesia and the conducted the demo flights there. And this helps us not only to extend the market to educate the public but also to enhance the communication with local authorities for their recognition of our aircraft and our aircraft's safety features, heading the way for the BTC's education. Thank you. Okay, thank you so much. Appreciate it, the color.

Speaker Change #149: with the revenue gross reapidly but that income margin will continue to improve in many years to have

Ting Song: We've been actively extending our plugins in the international market.

Speaker Change #149: thank you

Operator: Now, we're going to take our next question.

Speaker Change #150: thank you

Speaker Change #151: thank you nowiwe' goingto take next question

Operator: And the question comes to the line of Sinti Huang from My Apologies, from you, Chen from Highton Security. So, the line is open; please ask the question.

Ting Song: The study in commercial operations in overseas countries depends on the getting the local regulatory approvals and the certification. Right now, Ehang is working with CAC in advancing bilateral worthness agreement for the validation of the certificate for BTC of the UN216S with other countries' aviation authorities such as UAE, Brazil, Indonesia, and Thailand, etc. The timeline depends on the local regulatory schedule and the progress. And throughout the process, Ehang will actively cooperate and provide a required document to push forward the process.

Speaker Change #152: and the question comes an of cnian from mypologes from you cham from highon securities your an is open piece ask question

Operator: Okay, congratulations for the company's business progress. And thank you for taking my question. I have two questions.

Speaker Change #153: can you

Speaker Change #154: okay sim relation for the company's r going this progress and i thank you for taking my questionions i have two questchions

Wang Zhao: The first one is that the management can provide some insight into the company's plan for next to 16th operation, including the planning sites, social networks, and Highton strategies for each flight, from studying commercial operations. My second question is, we notice that the company is actively promoting the establishment of UAM operation sites and personnel training, as well as various sources. What is your current operation, cooperation model with local governments or customers?

Speaker Change #155: are the first qumade

Wang Zhao: And my second question is, as we get really impressive growth margins of over 60%. Just trying to understand what percentage of our supply chain actually would we share or overlap with the E.V, order control and business? Okay, both of our procurement are from China or Mexico with some electric components or chips imported from overseas. And battery design depends on the E.V, heart. So we design our own battery as well as we design our own intermotors and we outsource to the players in China. And so in general, there are certain[inaudible] Thank you. Okay. Yeah. Thank you. Yeah. Thank you for the color. Yeah. Congratulations. Again. Hold the direct card delivery. Thank you.

Speaker Change #156: the management who provide some insight into the company's plan for need to exceed operor suing the same five notalris and pricing judedges for each flight one studing commercial operations

Ting Song: And besides, we have already made a few deliveries to overseas markets like the Middle East and Indonesia and the conducted the demo flights there.

Operator: Now we're going to take up the next question.

Ting Song: And this helps us not only to extend the market to educate the public but also to enhance the communication with local authorities for their recognition of our aircraft and our aircraft's safety features, heading the way for the BTC's education.

Speaker Change #156: my second questionult may we noted that the company is actively promoti v establishment of new am operation size and personnel training across var prices

Ting Song: Thank you.

Wang Zhao: On the operational infrastructure front, Ehang collaborates closely by providing technical, requirements and design solutions, while the infrastructure construction is managed by local governments and our customers.

Speaker Change #157: what is your talrent operation cooperation model with local governance or customers suan sun is our cre should ro out so be assure near trial as po she for moving in the humpia hun put in dis here

Ting Song: Okay, thank you so much.

Wang Zhao: Operation sites in key locations have been launched, including Shenzhen OH Bay, Hefei, Luogang Central Park, Guangzhou Jiulong Lake, Zhuhai Tangjia Port, and Wenchengkending Lake. Each of these sites is equipped with facilities, including dedicated vertiports for EH216S, hangars, and passenger service areas.

Speaker Change #158: yeah are the ones is sure hostly that is the frank for getting from the year and be p the ship some almost twent the qu forommore sh and younger the uman renion

Wang Zhao: I have two questions. First of all, the first question is, regarding your current operation, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, the second question is, because the E1216 acquisition cost and maintenance cost is much lower than the high cost and we don't have pilot cost.

Wang Zhao: In addition, many local governments are planning to build operation networks for future air, mobility.

Speaker Change #158: ions

Wang Zhao: For example, Shenzhen targets to set up a thousand of low-altitude takeoff and landing, platforms, and Guangzhou plans to invest RMB 10 billion into low-altitude infrastructure. This will include over 100 regular-use vertiports and hundreds of community landing pads.

Speaker Change #158: yeah

Speaker Change #159: was up with without ego and he

Speaker Change #160: going you j year t you hm hong hong from h ja you h and one jo children high to the ho hohaa year that old ho g ph also the sentationship

Speaker Change #160: thir the un to the also able digho who instruation i want to the hundredin to po for a log to gonga hioan we see higher vention of the

Ting Song: Appreciate it, the color.

Speaker Change #160: akadani moga we sho iexand jaaw hun doong wang guang yo and a new

Ting Song: And my second question is, as we get really impressive growth margins of over 60%.

Sinti Huang: And the next question comes from Lan of Ting Song from Goldman Sachs. Your Lan is open. Please ask the question.

Ting Song: Just trying to understand what percentage of our supply chain actually would we share or overlap with the E.V, order control and business? Okay, both of our procurement are from China or Mexico with some electric components or chips imported from overseas.

Speaker Change #161: or onong drong ja engineer p putto acqu for h om you see from middle to the atangha jump evjando

Sinti Huang: Hi. Thank you for taking my question. So I will get together.

Ting Song: And battery design depends on the E.V, heart.

Huazhi Hu: My first question is about the progress of Ehang obtaining the TC of ET30. As we see that the ET30 and EH216s are in different size and features. So what are the key challenges of ET30 where you develop to compare to the EH216?

Speaker Change #162: qu anything jo i want which that our transgcer hoola isy is ire on the facial own u ageen

Ting Song: So we design our own battery as well as we design our own intermotors and we outsource to the players in China.

Speaker Change #163: so i onewoman call you want ressu you the tell out as you employ or nothing j oate how gent only shouldad on do it e back silicon te

Ting Song: And so in general, there are certain[inaudible] Thank you.

Speaker Change #163: even already asked the com jacer e on g had go r say may or pati you are going the chamber they don't how does you ago bybar jger bit r your t so you are go how

Ting Song: Okay.

Conor Yang: And my second question is on the R&D spending. So what's the expectation of R&D[inaudible] I will answer the first question. Thank you. This is the English translation. Leveraging the BD30 prototype, our R&D team is currently redesigning and upgrading our lease and crew's unit model for enhancing the buy performance. And we will keep you updated on this. And we will also submit the TCFB patient for our lease and the crew's model once it's released.

Ting Song: Yeah.

Speaker Change #164: judge a good digitalal for l you should have evate or hun in the here leadto hhandup the rossi are of a thir evid who don t your ion they jo home twent y your home meure they to put here the bat the backag but

Speaker Change #165: oyour first question beside the hundred al aviation and the hoical aviation s in onejan gen thitan and among other cities are also actively preparing their also application

Speaker Change #166: when the local operators have obtained that t c they will first start operations at our new caartusing one job and the course they look about central park and more times er with a t un ch and starting from the error i think i thinking you cases

Speaker Change #167: and throughout the process we will accumulate operational experience and the continuously refining our operational manu which will serve as a reference when new operators to mitigate their operational risks and certainties

Ting Song: Thank you.

Speaker Change #168: and for the question on the pricing ever if i see is conllate our targeted use cases compared to the hi ops our price can be half of them or even lower is very competitive

Ting Song: Yeah.

Ting Song: Thank you for the color.

Wang Zhao: Our EH216S is ideally suited for future urban air transportation. It's compact, lightweight, can fly autonomously, easy to manage fleets, and cost-effective.

Wang Zhao: In May, we were actively involved in shaping China's first group standard for EVATO vertiports. This will set a state for future industry standards. Notably, all vertiports built in accordance with this standard will be able to accommodate, EH216S.

Speaker Change #169: because the hand two one six s acquisition cost the animment ten is cost is much lower than than a high opure and we don't have piler costs

Ting Song: Yeah.

Wang Zhao: In terms of operation standards and certification, as Mr. Hu mentioned, in July, the CAAC accepted, the Air Operator Certificate, or OCA, applications by two operators. One is Yihang General Aviation, our subsidiary for UAM operations.

Ting Song: Congratulations.

Wang Zhao: Moreover, the local government is offering subsidized for even a wrong operation. For example, in Shenzhen and Jose, they plan to offer subsidized for even operators for aerosol seeing and air transportation within and between cities. And the subsidized range from 100 to 300 RMB per person each flight.

Speaker Change #170: moreover the local government are offering subsidized or even overwrong operation for example in suinggen and clothey they plan to offer subid will even operators for eroriseing and the air transportation within and between cities

Ting Song: Again.

Conor Yang: And since the EH216s now has three required certificates. So our main focus is on its sales and operations. And the EH216s is perfect for the air transportation within the cities because it's compact and does not need large take-off and ending areas. While the BD30 series lease and crew's model is meant to complement our current product portfolio and usage. And it is designed specifically for intercity air transportation. It's a nodule replacement for the EH216s. That is suitable for the air taxi uses within the urban area. Thank you.

Ting Song: Hold the direct card delivery.

Operator: Okay.

Ting Song: Thank you.

Speaker Change #170: and the subsidized range from one hundred to three hundred r and b promance at each flight

Wang Zhao: Thank you. For example, the E1216 acquisition cost and maintenance cost are much lower than the high cost, and maintenance cost are much lower than the high cost. And for your second question, the E1216 acquisition is our wholly owned sensitive rate and serve as the operation platform company to provide operational services to our customers that have demo projects and models. We have established a joint venture with the local government for partners through the E1 general aviation to provide a little operation services such as cooperation with our customer building group in Shenzhen. So our cooperation model will last bit.

Speaker Change #171: thank you

Operator: Now we're going to take up the next question.

Speaker Change #172: well be are one here our shuduty gand es one' your h harong you h sol hic

Wang Zhao: The other is Heyi Aviation, our operation joint venture in Hefei.

Wang Zhao: Afterwards, we will have more customers and partners in applying OC with our accumulated, experience and established safety standard. This will also help expanding our operation network.

Speaker Change #173: interestingwho thinker surethe sevama

Xinran Li: And the next question comes from Lan of Ting Song from Goldman Sachs.

Wang Zhao: In July, we also formed a strategy partnership with China Southern General Aviation, a leading, aviation service provider under the China Southern Airlines Group. Together, we are planning to introduce a range of services, including eVeto tourism, cross-island, flights and cargo transportation at Zhuhai Airport, Qimlong Ocean Kingdom, and surrounding islands.

Wang Zhao: Moreover, we are thrilled to see several local governments, including those in Shenzhen, Guangzhou, Hefei, and Zhuhai, are offering direct subsidies for eVeto commercial routes. These subsidies range from RMB100 to 300 per passenger per flight, providing robust support, for eVeto service operators.

Wang Zhao: In the international market, we continue to expand into the Middle East market in the, second quarter.

Wang Zhao: In April, we reached a strategy cooperation with the Abu Dhabi Investment Office and a, multilevel group. They will support our development in the UAE and the Middle East region.

Speaker Change #174: do you unple rope high or we you don't each other place or back from the equal to move for me

Xinran Li: Your Lan is open.

Xinran Li: Please ask the question.

Speaker Change #175: these should that go fither for each gyom njim ard you tofrom neither ither

Wang Zhao: In May and June, our EH216S completed debut flights in UAE and Saudi Arabia.

Wang Zhao: Since then, our eVeto footprint has expanded to 16 countries worldwide.

Wang Zhao: In the third quarter, we will continue to expand our business in overseas markets such, as Africa, the Middle East, Central America, and Europe.

Xinran Li: Hi.

Wang Zhao: Looking ahead, we will focus on executing our business strategy on sales and operations, and delivering results consistently.

Wang Zhao: Our goal is to play a key role in commercializing China's low-attitude economy and the global, UAM industry, with safety as our top priority.

Xinran Li: Thank you for taking my question.

Xinran Li: So I will get together.

Conor Yang: This is Connor. I will answer the second question regarding R&D. On the second quarter, R&D expenses about adjusted total arpeggs for the BD60. So going forward, we expect him that the R&D expenses will be around 45 to 50% of our total ups and we are committed to our R&D development. And for example, if you compare the number of first quarter ID expenses, actually we have improved about 42% with R&D expenses for first quarter.

Speaker Change #176: over the cou of counouncers he hun he going so of book joining at the hu jua jes would will on her acation

Speaker Change #176: strong for berho afforthe digital social the qu agential hurl we am goingil to by tes in inter u

Speaker Change #177: or the also kind of shine body to moto bt trumpin unsh if you likeither we more food courssua sh

Speaker Change #177: chisa

Speaker Change #178: and for your second question the hundred general eviation and our holy own sensitiveor and serve as the operation platform company to provide operational servic is tl customers

Conor Yang: And our future R&D efforts will focus on optimizing the EH-216 performance improvement and developing the long-haul EBITOs and other aircraft for both passenger carry as well as today. And that will include expenses on the R&D materials and our R&D gene expansion, test length, and every certificate certification expense. We can say that we believe our growth rate of revenue will be year over year will be a lot higher than overall R&D. So even though we continue to increase our R&D expenses, our R&D expenses, the R&D expenses and the presentation of the revenue will continue to drop in the coming years.

Speaker Change #179: that they have dmo project and the models

Speaker Change #179: we have established the joint ventro is the local government for panders through the eh general aviation to provide bito operation services

Operator: Thank you.

Speaker Change #180: such as coloe aviation inclproveate and the punctionong wind established with our customer boarding go be chang

Wang Zhao: We have provided necessary support, including the after-to-service operational guidance, technical specs, and personnel training. While the government and customers, they are responsible for planning and building infrastructure. The joint infrastructure warms and operational teams and systems to obtain the OC for commercial operations. By working together, we can ensure the safe operations and create a commercial model that can be filled up and replicated and sustained.

Speaker Change #181: so our copperation model will like this e ha provided necessary ist support including the episode services operational guidance technical backs and the personnel training while the government and customers they are responsible or pending at abbuilding infrastructure

Speaker Change #182: the joint will form and operational team and a system to obtain the oc or commercial operations

Wang Zhao: Next, I will turn the call over to our CFO, Connor Yang, on financial performance.

Wang Zhao: Thanks.

Connor Yang: Thank you, Mr. Wang.

Speaker Change #183: by working together if we can ensure the safe operations and the cr of commercial model that can be skilled up and the replicated and the suc thank you

Sinti Huang: Now we're going to take over the next question. And the next question comes to the land of Sinti Juan from Morgan Stanley. Your land is open. Please ask a question. Thanks for taking my question and congratulations on remarkable to your results. My first question is regarding your order backlog. I see E-Hon has met significant progress in secure new orders. Could you give us a quick update on how many purchase orders we have on hand, and when they will be delivered? And also, could we have a wrap-up idea on geographic mix in terms of the order backlog? So that's my first question. Thank you.

Wang Zhao: Thank you. Thank you for your answers.

Wang Zhao: Thank you.

Speaker Change #183: iously eminterest

Operator: Now we are going to take over the next question. Just give us a moment.

Speaker Change #184: thank you now we're going totake the next question

Guareth Zhao: And the next question comes to the line of Guareth Zhao from TF Security. Your line is open. Please ask the question.

Xinran Li: My first question is about the progress of Ehang obtaining the TC of ET30.

Speaker Change #185: did give us a moments

Connor Yang: Hello, everyone.

Speaker Change #186: and the next question comes to line of garzs j from t f security your line is openlypleas after question

Xinran Li: As we see that the ET30 and EH216s are in different size and features.

Guareth Zhao: Okay, so congratulations on the company's outstanding performance this quarter. I have two questions. The first one is, they add on, so they're expecting to maintain the quality growth trends.

Xinran Li: So what are the key challenges of ET30 where you develop to compare to the EH216?

garzs j: okay so congratulations one companyies' outstandic performance this quarter i have to questions the first one is getad on so do you expect you maintain quarof the growth trend

Xinran Li: And my second question is on the R&D spending.

Guareth Zhao: I'm looking forward to how do you view the company's revenue growth trajectory?

Xinran Li: So what's the expectation of R&D[inaudible] I will answer the first question.

Speaker Change #188: looking forward how do you view the company's revenue growth trajectory

Conor Yang: Thank you for your question.

Connor Yang: This is Connor.

Conor Yang: This is Carmen. We have three orders, over one thousand units in China. And our production has been revenue up to 50,000 people. We have three effective revenue growths in the third quarter. The third quarter is 123. That's more than 300%. We have three over here. And 20 over there are 20% of the total. We are confident that our revenue will achieve a triple-digit growth year over year. And we have three orders. And we have three.

Xinran Li: Thank you.

Speaker Change #189: onlytimableal ressive

Speaker Change #190: this is comments we up preaholders over one solin unness in china

Speaker Change #191: an our production has the been

Speaker Change #192: there ever came up withving any people

Connor Yang: Before I dive into details, please note that all numbers presented are in RMB and are for the second quarter of 2024.

Connor Yang: Unless stated otherwise, detailed analysis are available in our early press release on, our IR website.

Speaker Change #193: we expect mean in the revenue growth in third quarter guid is the thir quarter number one preinion

Connor Yang: I will now highlight some key points.

Speaker Change #194: the fourar three hundred percent on intrase year year and twenty one twenty from quo quarter

Connor Yang: I am pleased to report that our continued diligent execution has led to another quarter, of exceptional financial results in Q2 2024. We exceeded our revenue guidance by over 13%, achieved adjusted net income, and have generated, positive operating cash flow for three consecutive quarters. Notably, our OC application has been formally accepted by CAC, marking a significant step, closer to commercial operations and accelerated growth. Now, let's dive into details of our second quarter results.

Speaker Change #195: at we are covered than our revenue will achieve sued did pro year years and coming importthat

Connor Yang: Total revenue in second quarter were $102 million, representing a significant increase, of 919.6% year-over-year and a 65.3% increase from prior quarter. The increase were primarily driven by higher sales volume of EH216 series products. We delivered 49 units of EH216 series products in second quarter, a significant growth from, 5 units a year earlier and 26 units in first quarter 2024.

Connor Yang: Growth margin remains consistently high at 62.4% in second quarter, up 2.2% from 60.2% in second quarter 2023, and a 0.5% increase from 61.9% in first quarter 2024. The increase were mainly due to changes in revenue mix.

Connor Yang: Our high growth margin continues to underscore our competitive edge in the EVTOL sector.

Connor Yang: In second quarter, our adjusted operating expenses, which are operating expenses excluding, share-based compensation expenses, were $70.6 million, up 21.6% from $58 million in second quarter 2023, and up 29.6% from $54.5 million in the prior quarter. The increase was mainly due to higher sales-related compensations, expansion of sales channel, and increased expenditures on different models of EVTOL aircrafts.

Connor Yang: Second quarter adjusted operating loss was $4.7 million, a notable 90.9% improvement, from $51.3 million in second quarter 2023, and a 62.9% improvement from $12.6 million in first quarter 2024.

Conor Yang: For the area facing market in China, there are over 10,000 units in demand of two and six. And what is applied to transportation purposes in various cities in China, that will not demand what will be even larger. And together with the international demand. And so we believe that we should achieve a very high growth rate for the next three to five years.

Speaker Change #195: and we have same

Speaker Change #196: well now you re pring marke in china there

Speaker Change #197: it will p down the new in main of two andsay and what is apped to transportation purpose the various cities in china that will not de may will be even larger and together with the international demand

Xinran Li: This is the English translation.

Wang Zhao: [inaudible] In the next phase, our focus will be on extending production facilities, accelerating the deliveries of our existing auto-preply and the new orders. And for this year, we will also help our customers to apply OC, setting up a demonstration project in pioneer cities to exemplify evital operations. And in the future, we aim to replicate this operational site and share our experience in more locations in the country. To add on your question of distribution on the geographic mix, the orders, if you recall that the codes called the last year and as well as the first code of this year, our order's revenue contribute around 20 to 25 percent of our total revenue.

Speaker Change #198: so we believe that that we should have achieve a very high grow rate for the next three five year

Conor Yang: Thank you. Okay, thank you. That's very clear.

Speaker Change #199: thank you

Wang Zhao: So my second question lies in the overseas market. So we have noticed that. We have expanded Middle East market recently. So what's your competition like advantage in the market like Middle East? Do you just country's 10 to favor a little more that can fly longer distance? I will give you. in 2016. Sorry, in 2017. In terms of the Air Force identification, we also have an advantage over our peers. The UAE's General Civil Aviation Authority, or GCA, is moving forward a framework agreement with the CAC for mutual recognition of air force identification. We will be conducting some test flights for the GCA within this year.

Speaker Change #200: okay thank you that verycleer so much same question likeing overse market so we have noted that

Speaker Change #201: you have standing may market recently so with your competition like advantage ingin market like middle east djust countries tend you favor ebitto modls second ly longer distance

Xinran Li: Leveraging the BD30 prototype, our R&D team is currently redesigning and upgrading our lease and crew's unit model for enhancing the buy performance.

Xinran Li: And we will keep you updated on this.

Speaker Change #202: better how should it out jum don' should feder evv are esian the depagingin sing atam did the were in juaryy ev over the shopay she me assemday it ohio use

Xinran Li: And we will also submit the TCFB patient for our lease and the crew's model once it's released.

Speaker Change #203: i don't show me h union that you don't want mehunt you the sh ha 'rein the conneac e d may when the job then me h always share piing

Speaker Change #204: with unancial jeva she will not onlyer guys will enjoy happpens to the diidential play e doom not the holder he is a now the utual

Xinran Li: And since the EH216s now has three required certificates.

Wang Zhao: But since the TRT government is promoting no other day, we are seeing a very rapid growth from an appetite high. So we expect in terms of geographic mix, that will be 90 percent from China for this year and next. And the percentage of the overseas revenue will decrease from last year, even though the international demand is still quite strong. Thank you. Thank you, that's pretty comprehensive.

Xinran Li: So our main focus is on its sales and operations.

Speaker Change #204: since the opattabular she in huge of the wheel should deepefficiency you don't track a low

Speaker Change #205: ourancomitules continueto pressure

Speaker Change #206: one misian thesus that don't should ange shhoala who because of abanda two federomia yeshuny struion that down the soci tranch maality

Speaker Change #207: you madeid the hun on some the bushher one p she co who butatch from her doinguring a shout or human transgumes i requi ia

Speaker Change #208: but that your sy ronefficiencyesis o pattron or that idon't't need to show that at the behind area as a poenton asmship who transal conom jgle in futual

Speaker Change #209: is it

Speaker Change #210: in is the first bas that need to concept test l

Wang Zhao: So, now that after we get the TC, we still maintain the 26 percent part of the growth margin, that's the concentrating version. In terms of the overall name margin, we have achieved just a couple of our second quarter. And as we have seen, that's very, very strong revenue growth. So, we're expecting with the revenue growth rapidly, margin will continue to improve in many years to come. Thank you.

Operator: Now, we're going to take our next question.

Wang Zhao: And in May, we conducted in the first passenger carriage flight in Abu Dhabi, making the first of its kind in the UAE with GCA's approval.

Wang Zhao: It's a very significant milestone that lays the foundation for our future VDC. And Abu Dhabi are planning the UAE infrastructure now, including the body parts and the evidotermilose. We are very confident with the support of our local customers and pandas in the UAE and Saudi Arabia. We can be the first to commercialize evidot operations in the region. And we believe that the flag range is not the key issue for evidose. What really matters is the need of passengers and the fee-specific use cases. We've been seeing growing interest and amount for 860 s in the middle of the market, particularly for the urban air transportation.

Speaker Change #211: It's a very significant milestones that lays the foundation for our future BTC.

Speaker Change #212: That'd be a pending uhm infrastructure now, including the body parts and the EBIT turbulence.

Wrong Eye: And the question comes to the line of Sinti Huang from my apologies, from you, Chen from Highton Security. So, the line is open, please ask the question. Okay, congratulations for the company's business progress. And thank you for taking my question. I have two questions.

Speaker Change #213: We are very confident with the support of our local customers and tenders in the UAE and Saudi Arabia.

Speaker Change #213: It can be the first to commercialize EBIT of operations in the region.

Speaker Change #214: And we believe that the flight range, it's not a key issue for <unk>.

Speaker Change #215: What really matters is still needed meet needs of our passengers and a feed the specifics.

Speaker Change #216: Would we see would be.

Speaker Change #216: We're seeing growing interest and demand for our <unk> hundred 60.

Speaker Change #216: Yes.

Speaker Change #216: Middle East market, particularly for the urban Air Transportation.

Wang Zhao: And we will be introduced to a new type of aircraft to serve for more advertising.

Speaker Change #216: And we will introduce a new type of aircraft Tricia Moore that works fine.

Xinran Li: And the EH216s is perfect for the air transportation within the cities because it's compact and does not need large take-off and ending areas.

Guareth Zhao: Thank you. Excuse me, Gareth. Any further questions?

Speaker Change #217: Thank you.

Speaker Change #218: Excuse me guide with any further questions.

Xinran Li: While the BD30 series lease and crew's model is meant to complement our current product portfolio and usage.

Operator: Thank you.

Speaker Change #218: Thank you.

Operator: Now we're going to take over the next question. And the question comes with a line of wrong eye and show from CTX Security. Your line is open. Please ask a question.

Speaker Change #219: Now we're going to take over next question.

Speaker Change #220: And our question comes from the line of Ron Guy and Michelle from Citic Securities. Your line is open. Please ask your question.

Connor Yang: This quarter, we are proud to have achieved adjusted net income earlier than anticipated.

Operator: Okay. Thank you.

Connor Yang: Adjusted net income in second quarter was $1.2 million, compared to adjusted net loss, of $51.8 million in second quarter 2023, and adjusted net loss of $10.1 million in first quarter 2024.

Speaker Change #221: Okay. Thank you.

Wang Zhao: So first, congratulations on the company's strong performance and business progress. Here I have two questions. So for the first, so I mean with the cap state expansion plans under the Guangzhou, Hubei, and other locations. So could the management provide more insight into its cap state expansion plans and what can we expect in terms of the capital expenditure over the next two years? So it's my first question. Thank you.

Speaker Change #222: So first congrats.

Nathan on the company's strong performance in Venice progress this quarter.

Speaker Change #223: Here I have two questions.

Speaker Change #223: For the first.

Wang Zhao: I will answer the first question. Regarding your question, besides the cooperation and cooperation of the UAM operation sites and personnel training sites and personnel training sites and personnel training sites and personnel training sites,[inaudible] because the 116th acquisition cost and maintenance cost is much lower than the high cost and we don't have pilot cost. Moreover, the local government are offering subsidized for even a wrong operation. For example, in Xinjiang and Huazhi, they plan to offer subsidized for even operators for aerosol seeing and air transportation within and between cities and the subsidized range from 100 to 300 RMB per person each flight. Thank you.

Speaker Change #225: So I mean, we kept state expansion plans underway in Guangzhou.

Xinran Li: And it is designed specifically for intercity air transportation.

Speaker Change #225: Other locations so.

Speaker Change #226: Could management provide more insight into its <unk>.

Speaker Change #226: <unk> expanded plans and.

Speaker Change #226: What kind of effect.

Speaker Change #227: <unk> kept our expenditure over the next two years. So this is my first question. Thank you.

Wang Zhao: Yes. Thank you.

Speaker Change #228: Yes. Thank you.

Wang Zhao: You know, we in our current meaningful facilities, we plan to do more automation. As you know, we have signed a strategic agreement partnership with GAC, and they have a lot of experience in automation and supply chain management. So in Guangdong province, we will improve the automation in youthful factory, the current one, as well as we plan to build a new facility in Guangzhou together with GAC. And on the other side, that Hubei will build an assembly plan, that's our plan. So overall, in the next year, we should add down additional 1000 and your production. for next year.

Speaker Change #227: Hello.

Speaker Change #228: Q4 facilities.

Speaker Change #228: Then two more automation as you'll know we have signed strategic agreement and partnership with <unk>.

Speaker Change #228: They have lots of experience in automation and supply chain management.

Speaker Change #228: So in Guangdong province will improve the automation or factory. The current one as far as are we.

Speaker Change #228: The time to build new facilities in Guangzhou, together with GIC and neuroscience.

Speaker Change #228: We'll build the assembly plant that's helpful. So overall in the next year, we should.

As an additional 1000 annual production next year in terms of Capex.

Wang Zhao: In terms of CAPEX, we're building our network; that we're innovating our new headquarters, we're building lots of facilities, we're building our R&B labs, also building a test apply center, and together with all these factory expansion. So we expect now expect the CAPEX for 2024 will be about US$15 million, and CAPEX for 2025 will be around $20 million US dollars. Thank you.

Speaker Change #228: We're building on that.

Speaker Change #228: We are innovating, our new headquarters opinion lots of facilities, we're building our R&D labs.

Speaker Change #228: Also our building our past supply centers.

Speaker Change #228: And together with all this on a factory expansion. So we are expecting now expect.

Speaker Change #228: Capex for 2024 will be around USD 50 million and Capex for 2025 will be around $20 million.

Speaker Change #228: Thank you.

Okay. Thank you for your answers and.

Speaker Change #230: My second question is.

Speaker Change #231: Could management provide more information on rescinds, the ATM financing and.

Speaker Change #232: As commonly spun out the plans for the future.

Speaker Change #232: Okay. Thank you.

Speaker Change #232: Since April we have a race U S dollars and $76 2 million.

Speaker Change #233: Through our ATM program without disturbing the market.

Speaker Change #232: Our average price actually.

Speaker Change #232: Or the 76 million an average price of 16 by U S dollar per share.

Conor Yang: And right now, with the revenue growth and consistent possible cash reform operations, we decide not to continue selling ADS under the ATM program for this year. And we're always looking for the best financing strategy, and also to optimize our capital structure to help the company to build this strategy, and also to drive off this as well. Okay, thank you.

Speaker Change #232:

Speaker Change #232: But right now with the rapid revenue growth and consistent positive cash flow from operation with the site.

Connor Yang: Thanks to our prudent cash management and improved credit controls, we have achieved, positive cash flow from operations for the third consecutive quarter, adding strength to our balance sheet, cash flow, we will not continue selling ADS under the at-the-market offering in 2024.

Connor Yang: The proceeds already raised will fill the next phase of our development and growth strategy, aforementioned by Mr. Hu, including R&D for next-generation Evito technologies and products, team and product expansions, new headquarters in Guangzhou, upcoming commercial operations, and other business purposes. With the EH216-S having secured three certificates and our OC applications accepted by CAC, we, are well-positioned to commence commercial operations, setting the stage for a new phase of growth.

Connor Yang: We expect total revenue for the third quarter of 2024 to be around $123 million, representing, an increase of 329.8% year-over-year and 20.6% quarter-over-quarter. Having achieved positive operating cash flow for the third consecutive quarter and adjusted, net income in second quarter, we are confident that this upward trend will continue and ultimately lead to full-year positive cash flow in 2024 and foreseeable adjusted net income in 2025.

Connor Yang: That concludes our prepared remarks.

Speaker Change #232: To continue selling ABS under the ATM program this year.

Operator: Let's now open the call for questions.

Speaker Change #232: And we're always looking for the best financing strategy and also the optimized our capital structure.

Operator: Director, please go ahead.

Operator: Thank you, dear participants.

Operator: As a reminder, if you wish to ask a question over the phone, please press star, one, one, on your telephone keypad and wait for a name to be announced.

Operator: To withdraw a question, please press star, one, one again.

Operator: Please stand by.

Speaker Change #234: To help the company to build a strategy and also to drive all of them as well.

Operator: We'll compile the Q&A roll study. This will take a few moments.

Speaker Change #234: Okay. Thank you.

Operator: And now we're going to take the first question.

Operator: And it comes from Lan of Laura Lee from Deutsche Bank.

Speaker Change #234: Okay.

Operator: Okay, thank you for your answer, and congratulations again for the company. And so, thank you. Thank you.

Speaker Change #236: Okay. Thanks for your answer and congratulations again for us.

Speaker Change #237: Company. So thank you.

Thank you.

Speaker Change #237: Thank you.

Operator: Lan, is open, please ask your question.

Speaker Change #237: Thank you all given the time is limited let me turn the call back to Ms. Ann for closing remarks.

Anne Ji: Given the time is limited, let me turn the call back to Ms. Anne for closing remarks. Thank you all, Rachel. Thank you all for participating in our fiscal. If you have another question, please contact our IR team by email, or participate in the following investor events through the Canada information provided on our IR website. We appreciate your interest and look forward to our next earnings call. Thank you.

Operator: Thank you for taking my question and congratulations on the strong quarter.

Operator: So my first question is thinking about the timeline of commercial operation to oversee, markets, when would you expect to start that?

Operator: Is that 2025 realistic?

Operator: Hello, I'll answer this question.

Operator: We have been actively promoting overseas markets, but the premise of overseas commercial operations, is to obtain local supervision, permission and certification. At present, we are cooperating with the Chinese Civil Aviation Bureau to promote, pilot certification in countries such as the United Arab Emirates, Brazil, India and Thailand, as well as the R16 VTC. Time depends on the progress of the projects of each country's supervisor. So in this process, the Bureau will actively cooperate and provide relevant materials, and promote them with full authority in accordance with the requirements of the local authorities.

Operator: 在此之前,一航已经在海外的市场包括中东、印尼等国家有少量交互,并完成在当地的演示飞行,一是为了市场开拓和公共教育,二就是与当地举方密切沟通,让他们了解并信任我们的航空器和安全性,为VTC审定打好基础。所以,大部分的东西,我们生产和安装在我们自己的厂子里。谢谢。好的,谢谢克拉尔先生。恭喜你。 Thank you.

Ann: Thank you operator, and thank you all for participating on today's call. If you have another question. Please contact our IR team by email or participate in the following investor events calendar information provided on our IR website. We appreciate your interest and look forward.

Operator: Thank you.

Operator: Now we'll go and take our next question.

Operator: And the next question comes from Lan of Ting Song from Goldman Sachs.

Operator: Your line is open, please ask your question.

Operator: Hi, thank you for taking my question.

Operator: Here I have two questions.

Operator: So I will ask it together.

Operator: So, for the first, so, I mean, with the cap state expansion plans underway in Guangzhou, Hefei, and other locations, so, could management provide more insight into its, you know, its cap state expansion plans and what can we expect in terms of the capital expenditure over the next two years?

Operator: My first question is about the progress of Ehang obtaining the TC of VT30.

Operator: So, that's my first question.

Operator: As we see that the VT30, and EH216 are in different size and features.

Operator: Thank you.

Operator: So what are the key challenges of VT30 when you develop compared to the EH216?

Operator: Yes.

Operator: And my second question is on the R&D spending.

Operator: Thank you.

Operator: So what's your expectation of R&D spending in the next three years?

Operator: You know, in our current Yunfu facilities, we plan to do more automation.

Operator: We appreciate your interest and look forward, to our next earnings call.

Operator: And what would be your key focus on the R&D investment?

Operator: As you know, we have signed a strategic agreement partnership with GAC, and they have lots of, experience in automation, in supply chain management.

Operator: Thank you.

Operator: Will you spend more on the new model or the enhancement of the existing model?

Operator: So, in Guangdong province, we will improve the automation in Yunfu factory, the current, one, as well as we plan to build new facilities in Guangzhou together with GAC.

Operator: Thank you.

Operator: And on the other side, that Hefei will build the assembly plant, that's our plan.

Operator: Thank you.

Operator: So, overall, in the next year, we should add some additional 1,000 annual production, for next year.

Operator: This is the English translation.

Operator: In terms of CAPEX, we're re-innovating our new headquarters, we're building a lot of facilities, we're building our R&D labs, also building a test supply center, and together with all these factory expansion. So we are expecting, now expect, the CAPEX for 2024 will be about US dollar 15 million, and CAPEX for 2025 will be around 20 million US dollars.

Operator: Leveraging the VT30 prototype, our R&D team is currently, redesigning and upgrading our lease and crew dividend model. We're enhancing the performance.

Operator: Thank you.

Operator: And we will keep you updated on this.

Operator: Okay, thank you for your answers.

Ann: To our next earnings call. Thank you.

Operator: And we will also submit the TC application, for our lease and crew model once it's released.

Operator: And my second question is, could Mattamon provide more information, on recent ATM financing, and as companies, financing plans for the future?

Operator: And since the EH216S now has three required certificates, so our main focus is on its sales and operations. And the EH216S is perfect for the air transportation within the city because it is compact and it does not need large takeoff and landing areas.

Operator: Okay, thank you.

Operator: While the VT30 series lease and crew model is meant to complement our current product portfolio and use cases. And it is designed specifically for intercity air transportation.

Operator: Since April, we have raised US dollars 76.2 million US dollars to our, ATM program without disturbing the market. Our average price actually for all this 76 million average price is 16.5 US dollars per share.

Operator: It's not a replacement for the EH216S.

Operator: And right now with the rapid revenue growth and consistent positive cash flow from operations, we decide not to continue selling ADS under the ATM program for this year.

Operator: That is suitable for the air taxi uses within the urban area.

Operator: And we're always looking for the best financing, strategy and also to optimize our capital structure to help the company to build a strategy and also to drive our business growth.

Operator: That has concluded our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.

Operator: That does conclude our conference for today.

Operator: Thank you.

Operator: Okay, thank you.

Speaker Change #239: That does conclude our conference for today. Thank you for participating you may now all disconnect have a nice day.

Operator: Thank you for participating.

Operator: Okay.

Operator: Okay, thank you Matt for your answer and congratulations again for the company.

Operator: You may now disconnect.

Operator: This is Connor.

Operator: So thank you.

Conor Yang: [inaudible] I'm looking forward to how do you view the company's revenue growth trajectory? Thank you for your question. This is Carmen. We have three orders, over one thousand units in China. And our production has been revenue up to 50,000 people. We have three effective revenue growth in the third quarter. The third quarter is 123. That's more than 300%. We have three over here. And 20 over there are 20% of the total.

Operator: I'll answer the second question regarding R&D.

Operator: Thank you.

Operator: On the second quarter, R&D expenses is about adjusted total APEX of $46,000.

Operator: Have a nice day.

Operator: Thank you all.

Operator: So going forward, we expect that the R&D expenses will be around 45 to 50% of our total APEX.

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

Operator: And we are committed to our R&D development.

Operator: Thank you, operator.

Operator: And for example, if you compare the number of first quarter R&D expenses, actually we, have increased about 42% with R&D expenses for first quarter.

Operator: Thank you all for participating in our today's call.

Operator: And our future R&D efforts will focus on optimizing the EH216 performance improvement and developing, the long-haul eVTOLs and other aircrafts for both passenger carry as well as transport. And that will include expenses on the R&D materials and our R&D team expansion, test, flights, and airworthiness certification expenses.

Operator: If you have further questions, please contact our IR team by email or participating in the following investor events through the Canada information provided on our IR website.

Operator: Having said that, we believe our growth rate of revenue year-over-year will be a lot higher, than overall APEX.

Operator: So even though we continue to increase our R&D expenses, the R&D expenses, a percentage, of the revenue will continue to drop in the coming years.

Operator: Thank you.

Operator: Now we're going to take our next question.

Speaker Change #239: Okay.

Operator: And the next question comes from the line of Cindy Hwan from Morgan Stanley.

Operator: Your line is open.

Speaker Change #239: [music].

Operator: Please ask your question.

Operator: Thanks for taking my question and congratulations on remarkable QQ results.

Operator: My first question is regarding your order backlog.

Operator: I see EHON has made significant progress in securing new orders.

Operator: Could you give us a quick update on how many purchase orders we have on hand and when they, will be delivered?

Operator: And also, could we have a rough idea on geographic mix in terms of the order backlog?

Operator: So that's my first question.

Speaker Change #239: Yes.

Operator: Thank you.

Speaker Change #239: [music].

Operator: So in the next phase, we will focus on building new factories, speeding up delivery, and increasing, the order backlog.

Operator: This year, we are trying to create an operating model in the vanguard city.

Operator: We are applying for an operating license.

Operator: We want to make sure that the EH216S operating system really lands at the operating point.

Operator: In the future, we will be able to replicate the experience of the operating point in more, places in China.

Operator: At the same time, we want to increase the growth of orders.

Operator: Currently, our orders and the pre-orders has over 1,100 units in China market. We plan to deliver this by batches over the next 1 to 3 years per our customers' request, and their business development and the pace of their placing orders.

Operator: We are getting more and more new customers and orders. So we expect deliveries to keep growing.

Operator: In the next phase, our focus will be on expanding production facilities, accelerating the deliveries, of our existing order pipeline and the new orders.

Operator: And for this year, we will also help our customers to apply OCs, setting up demonstration projects, in pioneer cities to exemplify eval operations. And in the future, we aim to replicate these operational sites and share our experience, in more locations around the country.

Operator: To add on your question about distribution on the geographic mix, the orders, if you, recall that fourth quarter last year, and as well as the first quarter this year, our overseas order revenue contributed about 20 to 25% of our total revenue.

Operator: But since the PRC government is promoting no other delivery, we're seeing a very rapid, growth for the time.

Operator: So we're expecting that in terms of geographic mix, that will be 90% from China for this, year and next.

Operator: And the percentage of the overseas revenue will decrease from last year, even though, the international demand is still quite strong.

Operator: Thank you.

Operator: That's pretty comprehensive.

Operator: And my second question is regarding gross margin.

Operator: So how should we think about the gross margin over time, especially after we take off commercial, operations?

Operator: Right.

Operator: A gross margin, right now, we are the only company that can provide a product for commercialization.

Operator: Therefore, we have the pricing power, even though as we scale up, we will have like a, leverage in terms of procurement.

Operator: But on the other side, we'll continue to improve certain features of our 216.

Operator: And then after we get the TC, we'll still maintain a 6% plus gross margin.

Operator: That's because in terms of the overall net margin, we have a chip adjusted from second, quarter.

Operator: And as we have seen that the very, very strong revenue growth, so we're expecting with the, revenue growth rapidly, the net income margin will continue to improve in the many years to come.

Operator: Thank you.

Operator: Now we're going to take our next question.

Operator: The question comes from Cindy Huang from, my apologies, from Yu Cheng from Hightone, Securities.

Operator: Your line is open.

Operator: Please ask your question.

Operator: Okay.

Operator: Congratulations for the company's great business progress, and thank you for taking my question.

Operator: I have two questions.

Operator: The first one is could the management team provide some insight into the company's plans, for EH216 operations, including the planned flight commercials and pricing schedules for each flight once starting a commercial operation?

Operator: My second question is, we noticed that the company is actively promoting the establishment of UAM operation sites and personnel training across various places.

Operator: What is your current operation cooperation model with local governments or customers?

Operator: 簡單翻譯一下我的問題,是有兩個。首先,第一個是,EH216Expo是將會落地運營的航點航線和定價儀式。第二個問題是,公司也在積極推進各個地方的UAM運營網點建設和人員培訓。那麼目前各地的運營合作模式是怎麼樣的?

Operator: 非常感謝管理層。我現在回答第一個問題。關於你這個問題,除了一航通航和合意航空之外,一航智能在廣州、深圳、太原、無錫等地的合作夥伴也在同步籌備,積極推進OC的審定申請。各地的運營主體OC落地之後,會率先在廣州、一航的新總部、合肥、洛港、中原公園、還有深圳、無錫、太原、文成等地開展運營工作。會率先聚焦空中觀光遊覽的應用場景,過程中積累運營經驗並不斷完善運營手冊,供後續新成立的運營主體來參考,降低風險和難度。關於定價,我們目前的主要應用場景是空中遊覽以及以前常用的飛行工具是直升機,所以我們可以用直升機的票價來進行對比。我們的定價將非常有競爭力,是直升機的一半甚至更低,因為EH216S的購買價格比直升機低很多,而且沒有飛行員雇用的成本。電動化的結構維保價格也比直升機要低,所以競技效益會更好。加之各地政府陸續出台EVITO運營航線的補貼力度很大,比如深圳和合肥。對於EVITO運營空中遊覽、室內交通、城際交通等每人每加次補貼100至300元不等。 Because the Ehang-216F acquisition cost and maintenance cost is much lower than the helicopter, and we don't have pilot cost.

Operator: Moreover, the local governments are offering subsidized for e-vehicle round operations.

Operator: For example, in Shenzhen and Hefei, they plan to offer subsidized for e-vehicle operators, for LSIC and air transportation within and between cities.

Operator: And the subsidized range from 100 to 300 RMB per person for each flight.

Operator: Thank you.

Operator: For the second question, Ehang Holdings, a full-fledged subsidiary established by Ehang, serves as an operating platform company to provide services to customers and set up an operating demo version. Based on the Ehang Holdings platform, we have established joint operations with government-owned companies or partners, such as Hefei's Heyi Intelligence and Shenzhen Boling Group.

Operator: Our cooperation method is to provide social services, professional management, technical specifications and team training to Ehang.

Operator: Governments and clients are responsible for the planning and construction of infrastructure.

Operator: Joint operations companies form an operating team and form an operating system, and obtain OCs to carry out commercial operations.

Operator: Through multilateral cooperation, Ehang Holdings can operate safely and scale up, replicate and continue commercial operations in the future.

Operator: Thank you.

Operator: Thank you for your answers.

Operator: Thank you.

Operator: Now we're going to take our next question.

Operator: Just give us a moment.

Operator: And the next question comes to the line of Gareth Zhao from TF3.

Operator: Gareth, thank you so much for your answer.

Operator: Thank you.

Operator: The next question comes to the line of Gareth Zhao from TF Security.

Operator: Your line is open.

Operator: Please ask your question.

Operator: Okay.

Operator: So congratulations on the outstanding performance this quarter.

Operator: I have two questions.

Operator: The first one is that, so do you expect to maintain the growth trend?

Operator: Great.

Operator: Looking forward, how do you view the company's revenue growth trajectory?

Operator: Thank you for your question.

Operator: This is Connor.

Operator: We have pre-ordered over 1,000 units in China, and our production has been rapidly ramping up in the U.S. and the P.C.

Operator: So we expect to maintain the revenue growth in the third quarter.

Operator: So our guidance for the third quarter is 123 million. That's more than 300% increase year-over-year, and more than 20% growth quarter-over-quarter. We are confident that our revenue will achieve triple-digit growth year-over-year and quarter-over-quarter.

Operator: And we expect, for the REO Sightseeing Mark in China, there are over 10,000 units in demand of 216.

Operator: And when it's applied to, transportation purpose in various cities in China, that demand will be even larger, together with the international demand.

Operator: So we believe that we should achieve a very high growth rate for the next three to five years.

Operator: Thank you.

Operator: Okay, thank you.

Operator: That's very clear.

Operator: So my second question lies in the overseas market.

Operator: So we have noticed that you have expanding Middle East market recently.

Operator: So what's your competition, like advantage in the market like Middle East?

Operator: Do these countries tend to favor e-vehicle models that can fly longer distance?

Operator: Well, e-vehicle is never a problem.

Operator: The key is to meet the needs of customers and passengers, and the application scenario.

Operator: In addition, with the addition of new models of aircraft, we have received increasing interest and application needs for E-Vehicle 216S in the Middle East.

Operator: Thank you.

Operator: Yihang is the first e-vehicle company to conduct test flights in the Middle East, which our first piloted e-vehicle flight in Dubai was back in 2012.

Operator: Thank you.

Operator: Yihang is the first e-vehicle company to conduct test flights in the Middle East, which our first piloted e-vehicle flight in Dubai was back in 2012.

Operator: In terms of the Airworthiness Certification, we also have an advantage over our peers.

Operator: The UAE's General Civil Aviation Authority, or GCAA, is moving forward a framework agreement, with CAC for mutual recognition of Airworthiness Certification.

Operator: We will be conducting some test flights for the GCAA within this year.

Operator: And in May, we conducted the first passenger carrier flight in Abu Dhabi, making the first, of its kind in the UAE with GCAA's approval.

Operator: It's a very significant milestone that lays the foundation for our future VTCs.

Operator: In Abu Dhabi, we are planning UAE infrastructure now, including the vertiports and the EVETO, terminals.

Operator: We are very confident with the support of our local customers and partners in the UAE, and Saudi Arabia, we can be the first to commercialize EVETO operations in the region.

Operator: And we believe that the flight range is not a key issue for EVETOs.

Operator: What really matters is to meet the needs of the passengers and to feed the specific, use cases.

Operator: We've been seeing growing interest and demand for our Yehan 260S in the Middle East market, particularly for the urban air transportation.

Operator: And we will be introducing a new type of aircraft to serve for more diversified needs.

Operator: Thank you.

Operator: Excuse me, Gareth, any further questions?

Operator: Thank you.

Operator: Now we're going to take our next question.

Operator: And the question comes from the line of Rongai and Zhou from CITIC Security.

Operator: Your line is open.

Operator: Please ask your question.

Operator: Okay.

Operator: Thank you.

Operator: So, first, congratulations on the company's strong performance and business progress this, quarter.

Xinran Li: It's a nodule replacement for the EH216s.

Conor Yang: We are confident that our revenue will achieve a triple-digit growth year over year. And we have three orders. And we have three. For the area facing market in China, there are over 10,000 units in demand of two and six. And what is applied to transportation purposes in various cities in China, that will not demand what will be even larger. And together with the international demand. And so we believe that we should achieve a very high growth rate for the next three to five years. Thank you.

Operator: Okay, thank you. That's very clear.

Xinran Li: That is suitable for the air taxi uses within the urban area.

Xinran Li: Thank you.

Xinran Li: Okay.

Conor Yang: This is Connor.

Conor Yang: I will answer the second question regarding R&D.

Wang Zhao: So my second question lies in the overseas market. So we have noticed that. We have expanded Middle East market recently. So what's your competition like advantage in the market like Middle East? Do you just country's 10 to favor a little more that can fly longer distance? [inaudible] in 2016. Sorry, in 2017. In terms of the air force identification, we also have an advantage over our peers. The UAE's General Civil Aviation Authority, or GCA, is moving forward a framework agreement with the CAC, for mutual recognition of air force identification.

Conor Yang: On the second quarter, R&D expenses about adjusted total arpeggs for the BD60.

Wang Zhao: We will be conducting some test flights for the GCA within this year. And in May, we conducted in the first passenger carriage flight in Abu Dhabi, making the first of its kind in the UAE with GCA's approval. It's a very significant milestone that lays the foundation for our future VDC. And Abu Dhabi are planning the UAE infrastructure now, including the body parts and the evidotermilose. We are very confident with the support of our local customers and pandas in the UAE and Saudi Arabia.

Wang Zhao: We can be the first to commercialize evidot operations in the region. And we believe that the flag range is not the key issue for evidose. What really matters is the need of passengers and the fee-specific use cases. We've been seeing growing interest and amount for 860 s in the middle of the market, particularly for the urban air transportation. And we will be introduced a new type of aircraft to serve for more advertising.

Operator: Thank you.

Operator: Excuse me, Gareth, any further questions? Thank you.

Wrong Eye: Now we're going to take over the next question. And the question comes with a line of wrong eye and show from CTX security. Your line is open.

Wang Zhao: Please ask a question. Okay. Thank you. So first, congratulations on the company's strong performance and business progress. Here I have two questions. So for the first, so I mean with the cap state expansion plans under the Guangzhou, Hubei, and other locations. So could the management provide more insight into its cap state expansion plans and what can we expect in terms of the capital expenditure over the next two years? So it's my first question.

Wang Zhao: Thank you. Yes. Thank you. You know, we in our current meaningful facilities, we plan to do more automation. As you know, we have signed a strategic agreement partnership with GAC and they have a lot of experience in automation and supply chain management. So in Guangdong province, we will improve the automation in youthful factory, the current one, as well as we plan to build a new facility in Guangzhou together with GAC. And on the other side, that Hubei will build a assembly plan, that's our plan.

Wang Zhao: So overall, in the next year, we should add down additional 1000 and your production, for next year. In terms of CAPEX, we're building our network that we're innovating our new headquarters, we're building lots of facilities, we're building our R&B labs, also building a test apply center, and together with all these factory expansion. So we expect now expect the CAPEX for 2024 will be about US$15 million, and CAPEX for 2025 will be around $20 million US dollars. Thank you.

Conor Yang: So going forward, we expect him that the R&D expenses will be around 45 to 50% of our total ups and we are committed to our R&D development.

Conor Yang: Okay, thank you for your answers, and my second question is, could the company's finance plans for the future? Okay, thank you. Since April, we have raised US$76.2 million US$22, our ATM program, without disturbing the market, our average price actually for all this $76 million average price is $16.5 US$12 per share. And right now with the revenue growth and consistent possible cash reform operations, we decide not to continue selling ADS under the ATM program for this year.

Conor Yang: And for example, if you compare the number of first quarter ID expenses, actually we have improved about 42% with R&D expenses for first quarter.

Conor Yang: And that will include expenses on the R&D materials and our R&D gene expansion, test length, and every certificate certification expense.

Conor Yang: And we're always looking for the best financing strategy, and also the optimize our capital structure to help the company to build this strategy, and also to drive off this as well. Okay, thank you. Okay, thank you for your answer, and congratulations again for the company, and so thank you. Thank you. Thank you all.

Conor Yang: We can say that we believe our growth rate of revenue will be year over year will be a lot higher than overall R&D.

Conor Yang: So even though we continue to increase our R&D expenses, our R&D expenses, the R&D expenses and the presentation of the revenue will continue to drop in the coming years.

Conor Yang: Thank you.

Operator: Now we're going to take over the next question.

Cindy Huang: And the next question comes to the land of Sinti Juan from Morgan Stanley.

Cindy Huang: Your land is open.

Anne Ji: Given the time is limited, let me turn the call back to Ms. Anne for closing remarks. Thank you all, Rachel. Thank you all for participating our fiscal. If you have another question, please contact our IR team by email, or participating the following investor events through the Canada Information provided on our IR website. We appreciate your interest and look forward to our next earnings call. Thank you.

Cindy Huang: Please ask a question.

Cindy Huang: Thanks for taking my question and congratulations on remarkable to your results.

Cindy Huang: My first question is regarding your order backlog.

Cindy Huang: I see E-Hon has met significant progress in secure new orders.

Cindy Huang: Could you give us a quick update on how many purchase orders we have on hand, and when they will be delivered?

Cindy Huang: And also, could we have a wrap-up idea on geographic mix in terms of the order backlog?

Operator: That has concludes our conference for today. Thank you for participating. You may now all disconnect. Have a nice day.

Cindy Huang: So that's my first question.

Cindy Huang: Thank you.

Cindy Huang: [inaudible] In the next phase, our focus will be on extending production facilities, accelerating the deliveries of our existing auto-preply and the new orders.

Cindy Huang: And for this year, we will also help our customers to apply OC, setting up a demonstration project in pioneer cities to exemplify evital operations.

Cindy Huang: And in the future, we aim to replicate this operational site and share our experience in more locations in the country.

Cindy Huang: To add on your question of distribution on the geographic mix, the orders, if you recall that the codes called the last year and as well as the first code of this year, our order's revenue contribute around 20 to 25 percent of our total revenue.

Cindy Huang: But since the TRT government is promoting no other day, we are seeing a very rapid growth from an appetite high.

Cindy Huang: So we expect in terms of geographic mix, that will be 90 percent from China for this year and next.

Cindy Huang: And the percentage of the overseas revenue will decrease from last year, even though the international demand is still quite strong.

Cindy Huang: Thank you.

Cindy Huang: Thank you, that's pretty comprehensive.

Cindy Huang: And my second question is regarding growth margin.

Cindy Huang: So, how should we think about the growth margin over time, especially after we take off commercial operations?

Cindy Huang: Right, of course, margin.

Cindy Huang: Right now, we are the only company that can provide a product or commercialization. Therefore, we have the pricing power.

Cindy Huang: Even though as we scale up, we will have a leveraging in terms of our procurement.

Cindy Huang: But on the other side, we continue to improve certain features of our 26.

Cindy Huang: So, now that after we get the TC, we still maintain the 26 percent part of the growth margin, that's the concentrating version.

Cindy Huang: In terms of the overall name margin, we have achieved just a couple of our second quarter.

Cindy Huang: And as we have seen, that's very, very strong revenue growth.

Cindy Huang: So, we're expecting with the revenue growth rapidly, margin will continue to improve in many years to come.

Cindy Huang: Thank you.

Operator: Now, we're going to take our next question.

Yu Chen: And the question comes to the line of Sinti Huang from my apologies, from you, Chen from Highton Security.

Yu Chen: So, the line is open, please ask the question.

Yu Chen: Okay, congratulations for the company's business progress.

Yu Chen: And thank you for taking my question.

Yu Chen: I have two questions.

Yu Chen: The first one is that the management can provide some insight into the company's plan for next to 16th operation, including the planning sites, social networks, and Highton strategies for each flight, from studying commercial operations.

Yu Chen: My second question is, we notice that the company is actively promoting the establishment of UAM operation sites and personnel training, as well as various sources.

Yu Chen: What is your current operation, cooperation model with local governments or customers?

Yu Chen: [inaudible] Thank you very much.

Yu Chen: I will answer the first question.

Yu Chen: Regarding your question, besides the cooperation and cooperation of the UAM operation sites and personnel training sites and personnel training sites and personnel training sites and personnel training sites,[inaudible] because the 116th acquisition cost and maintenance cost is much lower than the high cost and we don't have pilot cost.

Yu Chen: Moreover, the local government are offering subsidized for even a wrong operation.

Yu Chen: For example, in Xinjiang and Huazhi, they plan to offer subsidized for even operators for aerosol seeing and air transportation within and between cities and the subsidized range from 100 to 300 RMB per person each flight.

Yu Chen: Thank you.

Yu Chen: [inaudible] I'm looking forward to how do you view the company's revenue growth trajectory?

Yu Chen: Thank you for your question.

Yu Chen: This is Carmen.

Yu Chen: We have three orders, over one thousand units in China.

Yu Chen: And our production has been revenue up to 50,000 people.

Yu Chen: We have three effective revenue growth in the third quarter.

Yu Chen: The third quarter is 123.

Yu Chen: That's more than 300%.

Yu Chen: We have three over here.

Yu Chen: And 20 over there are 20% of the total.

Yu Chen: We are confident that our revenue will achieve a triple-digit growth year over year.

Yu Chen: And we have three orders.

Yu Chen: And we have three.

Yu Chen: For the area facing market in China, there are over 10,000 units in demand of two and six.

Yu Chen: And what is applied to transportation purposes in various cities in China, that will not demand what will be even larger.

Yu Chen: And together with the international demand.

Yu Chen: And so we believe that we should achieve a very high growth rate for the next three to five years.

Yu Chen: Thank you.

Yu Chen: Okay, thank you.

Yu Chen: That's very clear.

Yu Chen: So my second question lies in the overseas market.

Yu Chen: So we have noticed that.

Yu Chen: We have expanded Middle East market recently.

Yu Chen: So what's your competition like advantage in the market like Middle East?

Yu Chen: Do you just country's 10 to favor a little more that can fly longer distance?

Yu Chen: [inaudible] in 2016.

Yu Chen: Sorry, in 2017.

Yu Chen: In terms of the air force identification, we also have an advantage over our peers. The UAE's General Civil Aviation Authority, or GCA, is moving forward a framework agreement with the CAC, for mutual recognition of air force identification. We will be conducting some test flights for the GCA within this year.

Yu Chen: And in May, we conducted in the first passenger carriage flight in Abu Dhabi, making the first of its kind in the UAE with GCA's approval.

Yu Chen: It's a very significant milestone that lays the foundation for our future VDC.

Yu Chen: And Abu Dhabi are planning the UAE infrastructure now, including the body parts and the evidotermilose.

Yu Chen: We are very confident with the support of our local customers and pandas in the UAE and Saudi Arabia.

Yu Chen: We can be the first to commercialize evidot operations in the region.

Yu Chen: And we believe that the flag range is not the key issue for evidose.

Yu Chen: What really matters is the need of passengers and the fee-specific use cases.

Yu Chen: We've been seeing growing interest and amount for 860 s in the middle of the market, particularly for the urban air transportation.

Yu Chen: And we will be introduced a new type of aircraft to serve for more advertising.

Yu Chen: Thank you.

Operator: Excuse me, Gareth, any further questions?

Operator: Thank you.

Operator: Now we're going to take over the next question.

Operator: And the question comes with a line of wrong eye and show from CTX security.

Operator: Your line is open.

Operator: Please ask a question.

Operator: Okay.

Operator: Thank you.

Operator: So first, congratulations on the company's strong performance and business progress.

Operator: Here I have two questions.

Operator: So for the first, so I mean with the cap state expansion plans under the Guangzhou, Hubei, and other locations.

Operator: So could the management provide more insight into its cap state expansion plans and what can we expect in terms of the capital expenditure over the next two years?

Operator: So it's my first question.

Operator: Thank you.

Operator: Yes.

Operator: Thank you.

Operator: You know, we in our current meaningful facilities, we plan to do more automation.

Operator: As you know, we have signed a strategic agreement partnership with GAC and they have a lot of experience in automation and supply chain management. So in Guangdong province, we will improve the automation in youthful factory, the current one, as well as we plan to build a new facility in Guangzhou together with GAC.

Operator: And on the other side, that Hubei will build a assembly plan, that's our plan.

Operator: So overall, in the next year, we should add down additional 1000 and your production, for next year.

Operator: In terms of CAPEX, we're building our network that we're innovating our new headquarters, we're building lots of facilities, we're building our R&B labs, also building a test apply center, and together with all these factory expansion.

Operator: So we expect now expect the CAPEX for 2024 will be about US$15 million, and CAPEX for 2025 will be around $20 million US dollars.

Operator: Thank you.

Operator: Okay, thank you for your answers, and my second question is, could the company's finance plans for the future?

Operator: Okay, thank you.

Operator: Since April, we have raised US$76.2 million US$22, our ATM program, without disturbing the market, our average price actually for all this $76 million average price is $16.5 US$12 per share.

Operator: And right now with the revenue growth and consistent possible cash reform operations, we decide not to continue selling ADS under the ATM program for this year.

Operator: And we're always looking for the best financing strategy, and also the optimize our capital structure to help the company to build this strategy, and also to drive off this as well.

Operator: Okay, thank you.

Operator: Okay, thank you for your answer, and congratulations again for the company, and so thank you.

Operator: Thank you.

Operator: Thank you all.

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

Anne Ji: Thank you all, Rachel.

Anne Ji: Thank you all for participating our fiscal.

Anne Ji: If you have another question, please contact our IR team by email, or participating the following investor events through the Canada Information provided on our IR website.

Anne Ji: We appreciate your interest and look forward to our next earnings call.

Anne Ji: Thank you.

Operator: That has concludes our conference for today.

Operator: Thank you for participating.

Operator: You may now all disconnect.

Operator: Have a nice day.

Q2 2024 EHang Holdings Ltd Earnings Call

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