GUANGZHOU - EHang Holdings Limited (NASDAQ:EH), a pioneer in the urban air mobility sector, has inked a deal with Taiyuan Xishan Ecological Tourism Investment Construction Co., Ltd. to foster the development of the low-altitude economy in Taiyuan City, Shanxi Province, China.
The agreement includes an immediate purchase of 50 units of EHang's EH216-S pilotless electric vertical takeoff and landing (eVTOL) aircraft for RMB 113 million (approximately USD 15.6 million).
This partnership is marked by the signing of a memorandum of understanding (MoU) and a significant purchase order, with Xishan Tourism also committing to a purchase plan for an additional 450 units of the EH216-S over the next two years. These aircraft will be utilized for aerial tourism and passenger transport among other low-altitude applications, aiming to accelerate the adoption and operation of pilotless eVTOLs in North China.
As part of the collaboration, EHang and Xishan Tourism will develop a Low-Altitude Economy Industrial Park in Taiyuan. This hub will encompass EHang's command-and-control center, marketing and exhibition center, operations center, after-sales service center, and a research institute. The objective is to create the largest eVTOL UAM operation base in North China, leveraging EHang's technological leadership and Xishan Tourism's cultural and tourism resources.
Initial efforts will focus on setting up EH216-S low-altitude sightseeing demonstration centers at scenic locations such as Xishan Mountain and Fenhe River in Taiyuan, with plans to expand the applications of pilotless eVTOLs to the wider Shanxi Province and beyond.
Shanxi Province has been recognized as a national demonstration province for general aviation industry development, and Taiyuan City is one of the national civil unmanned aviation demonstration zones, providing a conducive environment for the growth of the low-altitude economy.
This move follows a visit to EHang’s headquarters earlier in April by a delegation from the Shanxi provincial government, where Governor Xiangjun Jin lauded EHang's pioneering work in the low-altitude economy.
EHang's CEO, Huazhi Hu, expressed the company's readiness to leverage government support for the low-altitude economy and eVTOL industry, aiming to expand their market presence in China and prepare for commercial UAM operations.
The information in this article is based on a press release statement from EHang Holdings Limited.
InvestingPro Insights
As EHang Holdings Limited (NASDAQ:EH) cements its partnership to develop the low-altitude economy in Taiyuan City, investors are monitoring the company's financial health and market performance closely. With a market capitalization of around $1.05 billion, EHang's strategic moves in the urban air mobility sector are underpinned by some noteworthy financial metrics and projections.
An InvestingPro Tip highlights that EHang holds more cash than debt on its balance sheet, which could provide the company with financial flexibility to invest in new projects and technologies. Additionally, analysts are expecting sales growth in the current year, signaling confidence in the company's revenue-generating capabilities amidst its expansion efforts.
On the financial performance front, EHang's revenue showed a significant jump, with a growth rate of 158.45% for the last twelve months as of Q1 2024. This is further bolstered by an impressive gross profit margin of 63.27%, indicating the company's ability to retain a substantial portion of sales as gross profit. However, it's important to note that EHang is not profitable over the last twelve months, with a negative operating income margin of -182.44%.
The company's stock has also experienced high price volatility, which is reflected in its price performance. Over the last three months, the stock has returned 54.4%, yet it has seen a decrease of 6.51% in the past month. This volatility is something investors may want to consider, especially those looking for stability in their investments.
For those interested in deeper analysis, there are additional InvestingPro Tips available at InvestingPro that could provide further insights into EHang's financials and market performance. Using the coupon code PRONEWS24, readers can get an additional 10% off a yearly or biyearly Pro and Pro+ subscription to access exclusive data and insights that could inform investment decisions.
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