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spk00: good day ladies and gentlemen thank you for standing by welcome to ehang's first quarter 2024 earnings conference call as a reminder we are recording today's call now i will turn the call over to angie ehang senior director of investor relations miss anne please proceed
spk01: Hello, everyone.
spk05: Thank you for joining us on today's conference call to discuss the company's financial results for the first quarter of 2024. The earnings release is available on the company's IR website. Please note the conference call is being recorded, and the audio replay will be posted on the company's IR website. On the call today, we have Mr. Hua Zhihu, our founder, chairman, and chief executive officer, Mr. Zhao Wang, co-chief operating officer, and Mr. Connor Yang, Chief Financial Officer and Director of the Board. The management team will successfully give prepared remarks. Remarks delivered in Chinese will be followed by English translations. All translations is for convenience purpose only. In case of any discrepancy, the management statement in original language will prevail. A Q&A session will follow afterwards. Before we continue, please note that today's discussion will contain forward-looking statements made pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under equitable law. Also, please note that all numbers that are presented are in RMB and are for the first quarter of 2024, unless stated otherwise. With that, let me now turn the call over to our CEO, Mr. Hua Zhihu. Please go ahead, Mr. Hu.
spk08: Thank you, Annie. Hello, everyone. Thank you for attending today's e-sports intelligence call meeting. I am very happy to share with you the progress of e-sports intelligence in the first quarter of 2024. In the first quarter, we continued to grow steadily in sales and operations, showing our leading performance in the e-vito field of low-altitude economy. Last year, we achieved the highest performance we continued to implement production licenses, sales growth, business operation preparation, and product continuous optimization and other work. In October last year, after half a year of hard work, this year we successfully obtained the production license of EH216S issued by the Chinese Civil Aviation Bureau, which is PC, which means that our factory's production process and quality management system have been certified by the Chinese Civil Aviation Bureau expert group. The Chinese government continues to introduce a support policy for low-altitude economy. The domestic low-altitude economy is experiencing unprecedented explosive opportunities. In March this year, by the Chinese Ministry of Industry, Ministry of Technology, Ministry of Finance, Civil Aviation Bureau, the four ministries jointly issued a comprehensive application implementation plan for aircraft equipment innovation, indicating the development direction of unmanned, electrified, and intelligent, and to transport, logistics delivery, emergency rescue and other areas to achieve commercial use. The goal is that by 2030, China's low-altitude economy will form a market scale of tens of billions. This fully reflects the high importance of the Chinese government's high-level attention to the low-altitude economy strategic innovation industry, and a strong motivation for its sustainable development. Under the call of the central government, nearly 30 provinces and local governments have launched low-altitude economic development plans. to accelerate industrial development, from city planning, infrastructure construction, supply chain, production and manufacturing, product procurement, scene construction, commercial operation, and other multi-dimensional support for low-emission economic innovation enterprises such as Yihang. From the government's end, orders from local and overseas customers continue to increase, and delivery is also steadily advancing. Remember, we have delivered 26 EH216 series products, The delivery volume reached the highest in three seasons, and the revenue was more than twice as much as in the same period last year. In terms of operation, we are planning to create a low-air economic focus demonstration project in many cities in China. Since this year, our flight plan has not only covered many cities in China, but also extended to overseas countries such as the United Arab Emirates, Costa Rica, and Japan, and successfully realized the first flight of EH226S in the Latin America and the Middle East. At this stage, We are also actively expanding our industry chain, upstream and downstream cooperation, and continue to optimize product performance. In February this year, we reached a low-emission economic strategy cooperation with Guangxi Group, and will use the advantages of both sides in the field of smart manufacturing and electric travel products to cooperate. In April, we announced a strategic cooperation with G1 Jiyan to jointly develop the world's first E-Vito aircraft super fast charge, super fast charge battery. It is expected that from 30% to 80% of the charging time, only 5 to 10 minutes. The cycle speed can exceed 2000 times. This will make our unmanned vehicle EVTO performance continue to improve, so as to better satisfy the large-scale high frequency operation of EVTO aircraft in UAM scenarios. In addition, we have expanded the internal flight test of the VT30, which is in line with the WT30, The preparation work of VT30 test flight application is also in steady progress. On the basis of EH216-S test flight experience, we will realize the long-distance flight capability of VT30, which also has a perfect commercialized system design and safe test flight. With the leading technology and test flight advantages in the unmanned helicopter industry and the cooperation layout of industrial distance, We are confident to lead the fast-growing UAM industry to continue to occupy the leading position in the wide-ranging blueprint of low-emission economy. At an important stage in the company's commercialization and fast-track development, we are very happy to welcome Mr. Wang Zhao, the Chief Operating Officer of Lianxi. He has more than 20 years of professional knowledge and operating management experience in the field of technology and literature. This is the English translation of Mr. Hu's remarks. Hello, everyone. Thanks for joining eHealth conference call today. I'm excited to share with you the eHealth progress in the first quarter of 2024.
spk05: we had a continued steady growth in both sales and operations in the first quarter, demonstrating our first-mover advantage and exceptional execution in a vital sector of the low-altitude economy. Following obtaining the type certificate for our E-Hunt 216S last year, we have been pushing forward the production certification, driving sales growth, preparing for commercial operations, and continuously optimizing our products. After half-year continued efforts since last October, we have secured the production certificate, or PC, for EH216S from the Civil Aviation Administration of China, or the CAC. This means our production process and quality management systems has been validated by the CAC experts for our capability of sustainable mass production. As the world's first company to obtain EVITO type certificate, production certificate, and standard airworthiness certificate, our self-developed EH216S pedal-less passenger carrying EVITO has been thoroughly validated and recognized by the CAC, from model design to production and to the safety and airworthiness of each unit delivered. This gives us a global lead, and a competitive edge in the eventual sector of the low-altitude economy. The Chinese government has continued rolling out supportive policies on the low-altitude economy, and the domestic market is now poised for an unprecedented boom. In March this year, an implementation plan for innovative application of the General Aviation Agreement 2024-2030 were jointly issued by the four ministries in China, which are the Ministry of Industry and Information Technology, the Ministry of Science and Technology, Ministry of Finance, and the CAC. The plan outlines a development roadmap focused on the air-manned, electric, and intelligent aerial vehicles, and sets the goals to realize their commercial operations in urban areas for passenger transportation, logistics, and emergency rescue, with a target market size of trillions of RMB for the low-altitude economy in China by 2030. This fully reflects the Chinese government's great attention on the low-altitude economy as a strategic emerging industry and injects strong momentum into its sustainable development. In response to the central government initiative, nearly 30 provincial and municipal governments have rolled out their own low-altitude economy development plans in China, accelerating the industry's growth. These plans cover multiple dimensions, including urban planning, infrastructure development, supply chain, production, procurement, application scenarios, and commercial operations. to empower the innovative companies in the low-altitude economy industry like Yi Hang. We have been seeing a steady growth in order demands from government, scenic spots, and overseas customers, and our deliveries are also proceeding in a steady and orderly manner. In Q1, we have delivered 26 units of EH216 series products, a record high for a single quarter in our history. with revenues more than doubled that of the same period last year. On the operational side, we are working on multiple Low Altitude Economy demonstration projects in various cities in China. So far this year, our flight footprint has expanded to multiple domestic cities and overseas regions like the UAE, Costa Rica, and Japan. we have successfully completed the Han 216S debut demo flights in Latin America and the Middle East. At this stage, we are also actively expanding our upstream and downstream cooperation in the industrial chain and continuously optimizing our product performance. In February this year, we formed a strategic partnership with Guangzhou Automobile Company to collaborate on low-altitude economy initiatives leveraging each other's strengths in intelligent manufacturing and EVITO mobility products. And in April, we announced a strategic partnership with the Greater Bay Technology to co-develop the world's first ultra-fast charging, extreme fast charging battery solution for EVITO aircraft, which is expected to be charged from 30% to 80% in a short 5 to 10 minutes. with over 2,000 charging cycles. This will significantly boost the performance of our pilotless evitals, enabling them to meet the demands of high-frequency, large-scale operations for urban air mobility scenarios. Meanwhile, we are also stepping up internal flight testing of our VT30 lift and cruise model and preparing for its type certification. Based on the experience we have gained from the EHAM 216S certification, the long-range VD30 product will also boost a comprehensive and commercially available system design and airworthiness. With EHAM's leading technology and airworthiness advantages in the pilotless evito industry, as well as our collaborative industry layout, we are confident in driving the rapid growth of the UAM sector and maintaining our leading position in a promising low-altitude economy. As we are entering a critical stage for commercialization, we are excited to welcome Mr. Zhao Wang, our new Co-Chief Operating Officer, to join our management team. With over 20 years of rich experience and expertise in business operations for technology plus cultural tourism, He will play a vital role in driving our commercial operations forward. Today, he is joining the call with us. Let's welcome Mr. Wang to share some insights on our Q1 operational performance. Thank you.
spk10: Thank you, Mr. Hu. Hello, everyone. I'm honored to join Yi Hang as Co-Chief Operating Officer at this pivotal moment when our EH216S pilotless EVITO has achieved three certificates These certificates make a critical milestone in our commercialization journey. I'm committed to driving the company's strategic deployment, market expansion, product sales, and commercial operations with full force. I work closely with the team to seize the massive opportunities presented by the Trading RMB Low Attitude Economy and ensure that Eheim maintains its leading edge in the industry maximizing the business value for our company. On this front, we delivered 26 units of EH216 series products in Q1, representing a 136 year-over-year increase and a 13 quarter-over-quarter growth of the delivery volume. Notably, as part of conditional purchase order we had received from UAE customer for 100 units of EH216 series products. The first batch of five units, including EH216, S, L, and F had already delivered in Q1. In March, we partnered with the Wuxi local government for UAM securing a conditional purchase order for 100 units of EH216S. As part of it, the initial 10 units has been delivered in Q1, and the debut commercial flight demonstration ceremony is scheduled in May. Additionally, in Q1, our products have been also delivered to Hubei and Shanxi Province in China and Brazil in South America. Looking ahead, with the increasing production capacity, we expect our product delivery volume in Q2 to far surpass that in Q1. Recently, the low-attitude economy has been taking off in China. Further fueling the growth of our product demand after obtaining airworthiness certifications Governments, enterprises, and overseas customers are all eager to introduce our advanced pilot-based eventos to their local markets and are planning to develop comprehensive low-attitude economy ecosystem, including infrastructure, funding, talents, and operations. In order to present the air taxi application scenario as soon as possible, we have been working on the site planning and construction work for dozens of evicto takeoffs and landing vertipals in various places. Currently, Our order book is robust and our factory is gradually increasing production capacity to meet customer demand and support future sustainable growth. We are also actively exploring new customers and markets and pushing forward purchase orders and operational collaborations with domestic and international customers. On the commercial operations, we are working closely with local governments in cities like Hefei, Guangzhou, Shenzhen, and Wuxi to co-create low-altitude economy demonstration projects, planning to deploy UAM operation demonstration centers, and plan to launch low-altitude routes for urban air transportation. As we are setting up these demonstration projects, We are also developing a rigorous operational system and rules, infrastructure standards, maintenance system, personnel training, and qualifications to ensure safe operations and set industry benchmarks. We are also expanding our international market. At the DriftX event in Abu Dhabi, we showcased the diversity of our products and application use cases by displaying our EH216S, L, and F, and our long-range lift and cruise Evato VP30, which was its overseas debut. With the support of our local partners, the EH216S successfully obtained the approval from the UAE General Civil Aviation Authority. and completed its first passenger-carrying flight demonstration in the Middle East region. Meanwhile, we have also formed a strategic partnership with Abu Dhabi Investment Office and renowned FinTech Group multi-level group to facilitate our next phase of in-depth development in UAE. In March, with the support of our partners, AirX and Tsukuba Aviation, Japan's first UAM center, was established in Tsukuba City, serving as an operational base for EH-216S. As EHAS Co-Chief Operating Officer, I am committed to driving our commercial operations full steam ahead. Next, I will turn the call over to our CFO, Connor. Thank you.
spk02: Thank you, Mr. Wang. Hello, everyone. This is Connor. Before I dive into details, please note that all numbers presented are in RMB unless stated otherwise. Detailed analysis are available in our earning press release on our IR website. I will now highlight some key points. I'm pleased with the company's continued diligent execution as it led to us delivering stellar financial results for Q1 2024. We exceeded our quarterly revenue guidance of $58 million by over 6% and achieved positive operating cash flow for the second consecutive quarter. Most importantly, we secured the production certificate from CAAC clearing the path for mass production of our EH216-S and setting the stage for accelerated growth. Total revenue in Q1 was $61.7 million, representing a substantial increase of 178% year-over-year and 9.1% increase from the prior quarter. These scans were primarily driven by higher sales volume of the EH216 series products. We delivered 26 units of EH216 series evitals in Q1, over doubling 11 units in Q1 last year, and compared with 23 units in last quarter. Growth margin remained consistently high at 61.9% in Q1, compared with 63.9% last year and 64.7% in last quarter. The slight decline was mainly due to changes in revenue mix and increased costs per unit of the Airworthiness certified EH216 products. Our high gross margin demonstrates our competitive edge as a frontrunner in the EBITDA sectors. Our adjusted operating expenses, which are operating expenses excluding share-based compensation expenses, were $54.5 million, up 8.7% from $50.1 million in Q1 last year. and down 15.1% from $64.2 million in last quarter. The year-over-year increase was mainly due to increased sales-related compensation, and the quarter-over-quarter decrease was primarily because of the lower expected credit loss expenses due to improvement in credit controls in Q1 2024. Adjusted operating loss was $12.6 million, a 63.4% improvement from $34.3 million in Q1 last year, and a 49.5% improvement from $24.9 million in last quarter. Adjusted net loss was $10.1 million a 69.9% improvement from $33.6 million in Q1 last year, and a 54.4% improvement from $22.1 million in last quarter. Thanks to our prudent cash management and improved credit controls, we achieved positive cash flow from operations for the second consecutive quarter, further enhancing our balance sheet. At the end of Q1, Our cash and cash equivalents, short-term deposit and short-term investment balances were 323.8 million. To date, we have received over US dollar 55 million of gross proceeds from recent equity funding through an at-the-market offering. Furthermore, we have unused uncommitted credit facilities of 131 million RMB with expiration in April 2025. These further strengthen our liquidity position. Now that our EH216-S has obtained all three certificates ready for mass production and sales, Driven by favorable government policies and market enthusiasm, we are getting on a fast track to revenue growth and continuing improvement of our financial situation. We believe our diligent preparation for commercial operations equips us for maintaining this upward trajectory and will further foster ongoing expansion while capitalizing on our core capabilities to propel growth within the UAN sector. With that, we expect total revenues for the second quarter of 2024 to be around 19 million, representing an increase of over 800% year-over-year. That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.
spk00: Thank you. To ask a question, please press star 1 and 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 and 1 again. Please stand by while we compile the Q&A roster. Our first question comes from Ting Song with Goldman Sachs. Your line is now open.
spk01: Yes, thank you for taking my question.
spk06: So I want to check what's our CapEx plan for this year and in the long term. So given that we have received a PC certificate from government this year, so do we have any plan to further expand our capacity to drive up our shipment for the long term. Thank you.
spk02: Yes, thank you. To fulfill the rapid business growth, we plan to expand the current production capacity in our Yunfu factory to the maximum capacity. And we plan for a new headquarters also in Guangzhou with multiple functions, including offers the facilities takeover landing infrastructure, research labs for batteries, power system, command and control system, all in one place. With that, our plan for CAPEX is around US $10 million for this year for the expansion.
spk01: Thank you. One moment for our next question.
spk00: The next question will come from Cindy Wong with Morgan Stanley. Your line is now open.
spk04: Hi. Thank you for taking my question, and congratulations on splendid results. So I have two questions. So first, I want to ask about the certification timeline. As we have obtained on TC, AC, and PC, when do we expect to receive the OC to kick off operations? And my second question is related to the odor backlog. Can management update the current odor backlog based on binding purchase agreement? And how should we expect the delivery cadence throughout the year? Will there be any constraints or uncertainty on capacity or supply side? Thank you.
spk10: As a manufacturer, Yihang Intelligence is already a third-party carrier. Operating certification is the operating license required by the aircraft carrier to apply to the China Civil Aviation Bureau. Currently, Yihang is developing the operating standard of EH216-S with the Chinese Civil Aviation Bureau. After the Chinese Civil Aviation Bureau finally releases the relevant program documents, the operator will be able to formally apply for operating certification according to the program.
spk05: Thank you for your question. This is the translation of the answers to your first question. EHang as the manufacturer has obtained the TC, AC, and TC, while the OC, which is the operating certificate, is to be obtained by the air operator by submitting an application to the CEC and to receive the relevant qualifications. And currently, EHang is in cooperation with the CEC to formulate the operating standards of the ETH-216F. After the CAC issues relevant regulatory documents, the AIR operators can formally submit their OC applications based on the rules.
spk10: Customers with a large number of purchases will sign a framework agreement and a pre-ordered order with the company. The number will be up to hundreds. And according to their own business development needs and market development progress, For your second question, the customers with intention for the bulk purchases
spk05: will sign framework agreements and pre-orders with us. And the quantities will reach up to hundreds of units. And this will be converted into funding formal orders in batches, based on the customer's business development needs and the market extension progress, following a planned and paced approach. The 26 units delivered in the first quarter are all part of the initial batch orders, from these customers. And the conversion volume of these orders will gradually increase in subsequent quarters.
spk10: We will provide quarterly revenue guidance. The expected revenue for the second quarter is about RMB90 million. The company's judgment on performance guidance is based on the progress of quarterly business, the transformation of ideal orders, and the addition of orders. Currently, the company has enough orders. We will provide a quarterly revenue forecast
spk05: Revenues for the second quarter is expected to be approximately 90 million RMB. The company's assessment of the performance guidance is based on the quarterly business progress, the conversion of the intentional orders, and new orders. Currently, the company has a sufficient order book, and the production capacity is extending with the order quantities. In terms of the production capacity, we have already obtained the production certificate for the EHAM 216S, qualifying us for its mass production. Regarding the supply chain, we have a relatively mature and sufficient reserve. At present, we do not see any significant bottlenecks or uncertainties in our production capacity and the supply chain. That's very clear. Thank you.
spk00: One moment for the next question. The next question comes from Yu Chen with Haitong Securities. Your line is open.
spk07: Okay. Thank you for taking my question. Congratulations on the good performance in the first quarter this year. And I have two questions. The first one is, Regarding the operation, I would like to ask a question about the operational route. How many operational routes we are planning right now? And the second question is, could management team shed more light on new orders the company received in recent months?
spk06: Thank you.
spk10: In terms of operation routes, we are currently in Guangzhou Huangpu District. For your first question, regarding the operational route,
spk05: Currently, we have multiple UEM operations sites under construction in Guangzhou's Huangpu District, Shenzhen's Bao'an and Mohu District, Hefei's Baohe District, Wuxi-Liangxi District, and Tsukuba in Japan. And these sites are being prepared for the establishment of commercial operation routes. We are currently engaging in facility construction, test flights, personal training, and certification applications. Thank you.
spk10: Thank you. We have received an intentional purchase order from the Wuxi government for 100 units of E-101-6F in March and delivered 10 of these in the first quarter.
spk05: In the second quarter, we have added orders from Shanxi, Hunan, Wenzhou, and Zhuhai, as well as the purchase intentions from Xinjiang, Hainan, Guangdong, along with several overseas intentions. The deliveries will proceed steadily and orderly with a gradual increase. Updates on order executions will be released continuously. Please stay tuned. Thank you.
spk00: one moment for our next question. The next question we have is from Rong Zhao with TF. Your line is now open.
spk09: Hi. Thank you for taking my question. First, congratulations on the company's outstanding performance. So I have two questions. The first one is that I noticed the company has received pre-orders from overseas customers. like including those from Southeast Asia and Mideast. So could you please update us on the progress of Q1-6 overseas airworthiness notification and also how is the local regulatory acceptance? And the second question is that could you please summarize the customer types for Q1 deliveries? Are they mainly government customers? And also what is the proportion of overseas delivery overseas deliveries. Thank you.
spk02: Thank you for your question. I will answer the first question and I will let the CEO answer the second question. We have actively pushing forward with the validation of the type certificate for our EH216-S in overseas countries, which will enable us to meet the demand from international orders and lay the groundwork for further expansion into local markets. We know that the CAC has signed a bilateral agreement with many countries, aviation authorities around the world. Based on the type certificate already issued by the CAC, we also coordinate a mutual communication between the CAC and aviation authorities in Southeast Asia, Latin America, and Middle East, such as Brazil, Thailand, Indonesia, and the UAE. So the VTC is an administrative process that is simpler than obtaining the type certificate from zero to one. So before VTC is obtained, we can still deliver our products to overseas customers for their local uses for testing, for training, and certification. For example, we have delivered five EH216 series products to the customers to the UAE in the first quarter. We will accelerate the VTC certification process to further expand into international markets. Mr. Wang.
spk10: Let me answer the second question. We see that the demand and orders of domestic and foreign customers are increasing. With the announcement of the Chinese government's land and air economic development guidance, in the first quarter, we delivered 26 EH216 series products Your second question, we are seeing an increase in negotiation demand and orders from domestic and international customers.
spk04: And following the Chinese government's release of the guidelines for the developing low-altitude economy, we delivered 26 units of EM-216 series in the first quarter. And a significant portion of these deliveries are the government purchases, and approximately 23% going to the overseas customers.
spk05: And the target application scenarios include urban passenger transports the low-altitude tourism, logistics, and emergency firefighting, and other industry applications. Thank you.
spk00: One moment for the next question. The next question comes from June C.I. Wuxing. Your line is now open.
spk07: Thank you, Hu Zong, Wang Zong, Yang Zong, Xi Zong, for taking my questions. and congratulations on the good results and on obtaining PC this quarter. And I have two questions. The first one is we are also concerned about the bottlenecks during production. So are there any bottlenecks in the supply chain? And what is the domestic production rate of EH216S? Let me translate the first question. Congratulations to the company for such good performance We have established long-term cooperation and partnership with the suppliers on the supply chain.
spk10: We maintain close cooperation with multiple suppliers to ensure the stable supply and high quality of our Iveto products and components. At the same time, we are also actively looking for better suppliers to diversify our supply chain and reduce the risk of dependence on individual suppliers. Currently, there is no peace of mind in the supply chain. The components of the EH216 series of products have been realized in most of the domestic market. Our key core components include the control system,
spk05: For your first question, based on the developed UAV and electric vehicle supply chain system in China, we have established a long-term partnership with suppliers on our supply chain. We maintain close cooperation with multiple suppliers to ensure stable supply and high quality for our eventual components. At the same time, we are also actively seeking high-quality suppliers to diversify our supply chain and reduce risks from dependency on any single supplier. Currently, we do not see any bottlenecks in the supply chain. And most of the components for the EHAM 216 series have been localized. Our key components, including the control systems, motors, and batteries, are all produced domestically. we receive stable deliveries from our suppliers and maintain stable cooperation with them. Thank you.
spk07: Thank you. And I have a second question. In order to achieve the quarterly and annual break-even points, so how many EH216 units need to be delivered? Thank you. What data is given to you? Thank you. Based on our current cost structure and the trend of business expansion, we estimate that we can achieve an annual break-even point on a non-GAAP basis, which is excluding the share-based compensation expenses
spk02: by delivering around 200 to 250 units of EH216 product per year. And from a quarterly perspective, for example, in the first quarter, we have delivered 26 units, and our non-GAAP net loss has narrowed to just RMB 10 million. So with our current order book and production capacity expansion, we are confident that we can achieve non-GAAP break-even in the near future, quarterly. Thank you.
spk00: One moment. One moment for our next question. And the next question comes from Zixin Zhuang with Huatai. Your line is now open.
spk01: Hello, management team.
spk03: Thank you for taking my question. We noticed that the company sold EH216S through live streaming on Taobao platform in the first quarter. Did you see any new demand generated from this Taobao event? Will the company sell directly to the end users in the future? My second question is, Could the management team share more about the company's thoughts on evolutive battery solutions? When can the fast-charging battery be developed with GBT?
spk10: Let me answer the first question first. This is a very good question. Because everyone is paying attention to us, the users of the C-section of the satellite. Our sales activity of Taobao Live 216 is mainly to introduce and share the new type of air-to-air aircraft that can be driven by no one. At the same time, it can be purchased and used by these users. However, in order to make good ground-to-air flight operation services and rich use scenarios, our customer base is still based on government and enterprises. Ground-to-air passengers can buy tickets and sit through the AirTaxi operating system. In the future, ground-to-air users can naturally buy aircraft, not only for daily travel needs, It can also be integrated directly into the AirTaxi operating system when not using the aircraft. Based on our autonomous driving system, it becomes a robo-AirTaxi and gets operating benefits.
spk05: For your first question, that is a very good question, as people are paying attention to whether our aircraft can be sold to the CN users. Our Taobao live stream sale event for the EH-216 was primarily aimed at introducing and educating the public. about this new type of autonomous passenger elevator aircraft, and at the same time, demonstrating that they can be purchased and used by the end-users. However, to provide well-rounded low-altitude flight operation services and to enrich usage scenarios, our current customers are still primarily government and enterprises. End-users can purchase tickets and rides via the air taxi app. In the future, end consumers will be able to purchase the aircraft individually. Not only can the aircraft fulfill their daily travel needs, it can also be integrated into the air taxi operation system when are not in the individual use. Based on our autonomous driving system, these aircraft can become the robo air taxi and they generate operational revenues.
spk10: The second question. We have been actively exploring all kinds of eVeto battery solutions to further improve our product performance and efficiency, in order to achieve the best balance between safety, cost, and efficiency. We will focus on the energy density, power density, heat management, and cycle life of the battery. to continuously optimize and improve the performance performance of EVETO products in the shipping, delivery, and charging markets. For this reason, we have been cooperating with industry-related battery companies for many years to continue to study the new battery technology applied to EVETO, the solid-state Li-ion battery that cooperated with Xinyuan Energy, and the fast charge and fast release batteries that cooperated with G1 Jiyan to enter the testing stage. The new battery has a larger capacity, is faster and safer to charge,
spk05: For your second question, we have been actively exploring various EBITO battery solutions to further improve the performance and efficiency of our products. We strive to achieve the best balance between the safety, cost, and efficiency. We will focus on the battery energy density, power density, thermal management, and the circle life. and to continuously optimize and enhance the performance of our EVADO product in terms of range, payload, and charging time. To achieve this, we have been working with batteries in the industry for years, continuously researching for new battery technologies suitable for EVADOs. Both our solid lithium batteries developed by the Incs and our rapid charging and discharging batteries developed by the Greater Bay Technology have been entered testing phase. These new batteries with larger capacity, faster charging speed, and enhanced safety will significantly improve our operational efficiency.
spk01: Thank you. One moment for our next question.
spk00: The next question comes from Ting Kai with Zonta. Your line is now open.
spk07: Hello, management team. Thank you for taking my question. And I also have two questions. The first one is, what are the main uses of the ATM offering? are the plans for human capital investment as the company grows in size? And my second question is about the pipeline of the new type of invisible aircraft. Can you share more about the latest progress of VT30? Thanks.
spk02: Thank you. I'll take the first question.
spk07: Sorry.
spk01: Go ahead, please.
spk02: Yeah, I'll answer the first question. Thank you for your question. On the ATM offering, we have raised over 50 million US dollars through the ATM so far. And we can secure more funds to support the company's growth, to enhance our financial flexibility and strengthen our balance sheet, and to better accept the market changes and challenges. These fund rates will provide us with more resources to invest in expansion in the sales team and the commercial operations, R&D, and our production capacity. Currently, we have around 380 employees, which is not too much increase from last year. But with the new fund rates, we will speed up our team expansion to support our business But the growth rate of the operating expenses will be definitely below our top-line growth rate. Thank you, Mr. Wang. Let me answer the second question.
spk10: EH216-S is a product that we first reviewed by the market. At this stage, commercial operations will focus on it. At the same time, in order to better deal with the diversification needs of different scenarios of global urban air traffic, and maintain the priority of the industry. We will continue to develop new products and technologies. VT30 is a product that we are currently developing. It has a variety of characteristics such as unmanned driving, electric, integrated, and long-term operation. With the successful market experience of EH216-S, the preparation work of VT30's related research and market application is going on steadily. In April, we conducted the first overseas display of VT30 in Argentina. We will announce more progress in the future. Thank you.
spk05: For your second question, the EHM216S is our first product to receive the airworthiness certification, and the commercial operations will be carried out focusing on the EHM216S at this stage. Meanwhile, to better address the diverse needs of urban air transportation scenarios globally, and maintain our leading position. We will continue to develop new products and technologies. The VD-30 is a product that we are currently developing, with features including airman piloting, electric propulsion, lift and cruise type, and long endurance. Following the successful airworthiness experience of the Ehang 216S, the relevant research and development of the VD-30 and the preparations for airworthiness applications are progressing steadily. We conducted the first overseas showcase of the BT30 in UAE in April, and we will announce more progress in due course. Thank you.
spk00: Thank you. This will conclude the Q&A session due to the time limit. And I would now like to turn the call back to Ms. Ann for closing remarks.
spk05: Thank you, operator, and thank you all for participating on today's call. If you have any further questions, please contact our R team by email or participating in our following investor events through the calendar information provided on our R website. We appreciate your interest and look forward to our next earnings call. Thank you.
spk00: Thank you all again. This concludes the call. You may now disconnect.
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