Net loss in 4Q24 further narrowed; target to achieve 97% revenue growth in 2025E

亿航智能(EH)\r

EHang’s 4Q24 net loss narrowed 35% YoY to RMB47mn, helped by strongelectric vertical take-off and landing (eVTOL) aircraft delivery growth of 2.4xYoY. For 2025, EHang targets to achieve revenue of RMB900mn, suggesting97% YoY growth. EHang is the first manufacturer in China to obtain the threeessential certificates for the mass production of eVTOL aircraft, making it 1-2years ahead of its competitors. We expect the potential approval of operatorcertification (OC) for its subsidiaries this year will serve as a key share pricecatalyst. Our earnings forecast for 2025E/26E is unchanged. Maintain BUY withunchanged TP of US$30, based on 15x 2025E P/S.\r

Key highlights in 4Q24 results. Revenue surged 1.9x YoY to RMB164mn,driven by 2.4x YoY growth of eVTOL aircraft delivery (78 units). Grossmargin narrowed 4ppt YoY to 60.7% due to a high base, which is within ourexpectation. Selling expense ratio /administrative expense ratio / R&Dexpense ratio were reduced by 14.6ppt / 56ppt / 33ppt YoY to 22% / 42% /34%. Net loss narrowed by 35% YoY to RMB47mn. EHang achievedpositive operating cash flow for five consecutive quarters. For the full yearin 2024, EHang’s revenue surged 2.9x YoY to RMB456mn while net lossnarrowed 24% YoY to RMB230mn. As at end-2024, EHang’s net cash andshort-term investment amounted to RMB1bn.\r

Strong sales volume growth on track. After EHang obtained the TypeCertificate (TC) in Oct 23, the Airworthiness Certificate (AC) in Dec 23 andthe Production Certificate (PC) in 2024, EHang delivered 49 / 63 / 78 unitsof EH216 series products in 2Q/3Q/4Q24, representing substantial growthof 8.8x / 3.9x / 2.4x YoY. Deliveries of the EH216 series surged 3.1x YoYto 216 units for the full year in 2024. We forecast deliveries to be doubled in2025E.\r

Expansion in both China and overseas. In China, EHang continues tosecure new orders from clients such as Weihai High-Tech Zone andSunriver, and deliver eVTOL products to multiple cities including Shanghai,Weihai, Wenzhou, Shaoguan, Wuhan, etc. Overseas, EHang has expandedEH216-S’s flight footprint to 16 cities in Japan, Thailand and Mexico, andcompleted Europe’s first-ever urban flight of a pilotless eVTOL aircraft inSpain.