Driven by intensive policies, the low altitude economy is gradually showing dividends, and leading companies in the industry are also experiencing a significant increase in performance.
On August 22nd, Yihang Intelligence (NASDAQ: EH) released its second quarter performance report, which showed that the company achieved a total revenue of 102 million yuan in the second quarter, a year-on-year increase of 919.6%, setting a new historical high. The adjusted net profit is 1.15 million yuan, achieving a turnaround from losses to profits.
Yihang's response to the Huaxia Times reporter stated that the net profit after adjustment was mainly due to the acceleration of production and delivery of its EH216-S product, coupled with the support policies issued by the government to promote the development of the low altitude economy, driving a significant increase in demand and orders from domestic and foreign customers, including the government and tourism operators, and driving a substantial increase in revenue during the period.
On the day of the release of the second quarter report, the stock price of Yihang surged. On August 22nd Eastern Time, Yihang closed at $14.52 per ADS, up 16.44%.
After adjusting the net profit, we achieved a turnaround from losses to profits
Yihang is currently the only eVTOL host manufacturer listed in the domestic low altitude economy field. The company was established in Guangzhou in 2014 and went public in the United States in 2019.
The quarterly report shows that Yihang's total revenue for the second quarter was 102 million yuan, a year-on-year increase of 919.60% and a month on month increase of 65.30%; The operating loss was 77.4 million yuan, with a year-on-year increase of 2.80% and a month on month increase of 17.60%. In terms of profit, the net profit for the second quarter was -71.6 million yuan, a decrease of 5.40% compared to the same period last year and an increase of 13.00% compared to the previous quarter. It is worth mentioning that the adjusted net profit was 1.2 million yuan, achieving a turnaround from losses to profits.
Behind this is the accelerated delivery process of EH216-S series products under Yihang. Yihang EH216-S is the first manned eVTOL in China to obtain airworthiness "three certificates" (model qualification certificate, production license, single aircraft airworthiness certificate) and enter mass production delivery. Currently, the company has signed purchase contracts with multiple local governments. In April of this year, the product obtained a production license issued by the Civil Aviation Administration of China and officially entered large-scale production.
The quarterly report shows that Yihang delivered a total of 49 EH216-S aircraft in the second quarter, the highest quarterly delivery volume in history. In the second quarter of 2023, there were 5 aircraft, and in the first quarter of this year, there were 26 aircraft. According to the official website of Yihang, the official guide price of EH216-S in the Chinese market is 2.39 million yuan, and the official guide price outside of China is 410000 US dollars.
The EH216-S has obtained three airworthiness certifications, allowing us to accelerate production and delivery processes. Coupled with the support policies issued by the government to promote the development of the low altitude economy, it has driven a significant increase in demand and orders from domestic and foreign customers, including the government and tourism operators. Therefore, we delivered 49 EH216-S aircraft this quarter, setting a new historical high and driving significant revenue growth, "Yihang told reporters from Huaxia Times.
The full name of eVTOL is electric vertical takeoff and landing aircraft. The manned eVTOL is essentially an electrified aircraft belonging to general aviation. The product needs to undergo airworthiness certification from the Civil Aviation Administration of China from research and development to landing application, which is a long and costly process. Therefore, it is also known as the "burning money" industry. Previously, industry investors told reporters that an eVTOL model requires at least 1 billion yuan in investment from research and development to airworthiness certification.
Han Tao, an expert member of the Civil Aviation New Think Tank, told a reporter from Huaxia Times that Yihang's net profit in the second quarter after adjustment has turned losses into profits, which on the one hand conveys that Yihang's products have been recognized by the market and investment institutions; On the other hand, it can be expected that Yihang's future operating cash flow will maintain a positive growth trend.
The reporter noticed that the quarterly report shows that Yihang has achieved three consecutive quarters of positive operating cash flow in the second quarter.
Yihang introduced to reporters, "Currently, the company has already booked thousands of EH216 series eVTOLs in the Chinese market. Looking ahead to the third quarter, with the increase of production capacity, we expect to maintain a growing delivery trend, and the revenue in the third quarter is expected to reach 123 million yuan. At the same time, we expect to receive more new purchase orders
In its quarterly report, Yihang expects its total revenue for the third quarter to be approximately 123 million yuan, a year-on-year increase of approximately 329.8% and a month on month increase of 20.6%.
Expected to obtain the first aircraft operation qualification certificate within the year
As of now, over a thousand eVTOL orders from Yihang mainly come from local governments or scenic area operators. Among them, Yihang signed a procurement agreement for 300 aircraft with Wencheng County, Wenzhou, Zhejiang Province; Signed a procurement agreement for approximately 500 aircraft with Xishan Culture and Tourism in Taiyuan, Shanxi. In addition, the company has signed contracts with Hong Kong, Guangdong, Hainan, Jilin, Liaoning, and multiple foreign clients and has delivered them gradually.
In addition to the 26 aircraft delivered in the first quarter, Yihang has already delivered 75 EH216 series eVTOL products in the first half of this year. The reporter found that the products currently delivered are mainly used in the field of low altitude tourism. Among them, 27 EH216-S aircraft were delivered to Wencheng County, Wenzhou City in June this year, and the local plan is to build air tour routes at multiple scenic spots within the year; The first batch of 10 EH216-S aircraft will be delivered to Taiyuan Xishan Culture and Tourism in July, and will be put into local low altitude tourism and sightseeing services.
These eVTOL products need to obtain an Aircraft Operation Certificate (OC) from the relevant operators before they can be put into operation. In July of this year, the Civil Aviation Administration of China officially accepted the OC application for Yihang Intelligent Unmanned Aerial Vehicle. The applicants for the operation qualification certificate this time are Guangdong Yihang General Aviation Co., Ltd., a wholly-owned subsidiary of Yihang Intelligence specializing in UAM operation services, and Hefei Heyi Aviation Co., Ltd., a joint venture operating company of the company in Hefei.
Yihang told reporters, "The review team of the Civil Aviation Administration of China has completed the document review work and will conduct on-site review in Hefei. It is expected that the first aircraft operation qualification certificate will be approved within this year. In addition, our customers and partners in Guangzhou, Shenzhen, Taiyuan, Wuxi and other places are actively preparing OC applications to accelerate the construction of EH216-S as a demonstration model for low altitude economic commercial operation in the local area
It is reported that under the strategy of combining operation and sales, Yihang is also accelerating the preparation work for urban air traffic commercial operations for customers in various places, including personnel training, infrastructure construction, operational standards, and certification.
Han Tao stated that the development speed of low altitude economy is constantly accelerating, but there are still many difficulties in the implementation and application of eVTOL in low altitude tourism, including the promotion of policies related to eVTOL low altitude tourism, airspace opening, and regulatory formulation, which still need time to gradually land and improve; In terms of infrastructure construction, eVTOL requires significant investment and time to build corresponding take-off and landing sites, charging facilities, maintenance systems, etc; In terms of air traffic control and safety, it is necessary to address how to effectively manage air traffic in low airspace, avoid congestion and conflicts, continue technological investment, and implement strict safety management measures.
In addition, eVTOL low altitude tourism also needs time to gain consumer recognition of its safety, comfort, and reasonable price, and to enhance market acceptance Han Tao said.