EHang Holdings Limited ADS

EH Details

Q3FY20 Quarterly Upmdate: EHang Holdings Limited ADS (NASDAQ: EH) is a leading autonoous aerial vehicle (AAV) technology platform company. The market capitalization of the company as on 18 February 2021 stood at ~$3.34 billion. The company has recently announced its Q3FY20 quarterly results for the quarter ended September 30, 2020. Revenues grew by 104.3% to $10.5 million in Q3FY20 as compared to the previous corresponding period. There was an increase in the gross margin by 430 bps to 59.2%, driven by the optimization of cost of certain products and the change in revenue mix. EH narrowed down its operating losses to $0.3 million during the period. The company made a sale of 23 units of its flagship passenger –grade AAV in the given quarter as compared to a sale of 18 units in the previous corresponding period.

Q3FY20 Financial Performance (Source: Company Reports)

The company recently responded to the allegations raised in a report by Wolfpack Research dated February 16, 2021. EHang Holdings Limited has refuted the findings of the report and has stated that it is of the view that the report contains several errors, unsubstantiated statements and misinterpretation of information.

Outlook: The company is optimistic about the launch of its products-EH216F and EH216L, both based on the latest EH216 passenger-grade AAV technology platform. Both the products are expected to meet strong market demand for high-rise firefighting solutions and heavy-lift aerial logistics solutions and are anticipated to drive the future revenues of EH.

Stock Recommendation: As per ASX, the stock of EH is trading below its average 52-weeks’ price band of $129.80-$7.59. The stock of EH gave a positive return of ~662.96% in the past six months and a positive return of ~443.91% in the past three months. On a technical analysis front, the stock of EH has a support level of ~$46.47 and a resistance level of ~$76.36. Considering the significant rise in the stock price over the past few months and current trading levels, we are of the view that most of the positive factors of the company have been discounted at current trading levels. Hence, we suggest investors to wait for better entry level and give an ‘Expensive’ rating on the stock at the current market price of $61.19, down by 21.28% as on 18 February 2021.

EH Daily Technical Chart (Source: Refinitiv, Thomson Reuters)

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