GlobeNewswire Inc | Aug 25, 2021 06:05AM EDT

August 25, 2021

Achieved Record High Quarterly Gross Margin Again EHang 216 AAV's CAAC Type Certification Process PrioritizedReleased VT-30 Long-Range Passenger-grade AAVCompleted EHang 216Fs Technical Examination for CommercializationCommenced Operations of New Yunfu Production Facility

GUANGZHOU, China, Aug. 25, 2021 (GLOBE NEWSWIRE) -- EHang Holdings Limited (EHang or the Company) (Nasdaq: EH), the worlds leading autonomous aerial vehicle (AAV) technology platform company, today announced its unaudited financial results for the second quarter ended June 30, 2021.

Second Quarter 2021 Financial and Operational Highlights

-- Total revenues were RMB12.2 million (US$1.9 million), down 65.9% year over year. The decrease was mainly due to the strategic transition into a more operation platform-oriented model. -- Gross margin was 68.0%, an increase of 10.4 percentage points year over year. The increase was mainly due to higher margin of a command-and-control system for smart city management project completed in the second quarter of 2021. -- Operating loss was RMB74.9 million (US$11.6 million), compared with operating loss of RMB19.2 million in the second quarter of 2020. -- Adjusted operating loss1 (non-GAAP) was RMB49.4 million (US$7.7 million), compared with adjusted operating loss of RMB11.1 million in the second quarter of 2020. -- Net loss was RMB74.6 million (US$11.6 million), compared with net loss of RMB19.7 million in the second quarter of 2020. -- Adjusted net loss2 (non-GAAP) was RMB49.1 million (US$7.6 million), compared with adjusted net loss of RMB11.7 million in the second quarter of 2020. -- Sales of the EHang 216 series of passenger-grade AAVs, were 3 units, compared with 16 units in the second quarter of 2020, as the Company is experiencing a gradual transition from a product sales focused model to an operation platform-oriented model.

Second Quarter 2021 Business Highlights

-- The EHang 216 AAVs CAAC Type Certification Process Prioritized

In January this year, the Civil Aviation Administration of China (CAAC) officially accepted EHangs Type Certification application for the EHang 216 AAV. Since April, the CAACs designated type certification expert team has conducted several rounds of review meetings and inspections. Critical consensus has been reached that the type certification of EHang 216 AAV is an important project in China and needs to be prioritized.

-- Release of the Long-Range VT-30 Passenger-grade AAV to Expand Regional Air Mobility Coverage

In May, EHang released the VT-30, a new model of electric dual-seat passenger-grade AAV in EHangs product suite that is designed for inter-city air transportation and complementary to the EHang 216 designed for intra-city air mobility. With a hybrid structure of eVTOL and fixed wings, the VT-30 is designed to travel a distance of up to 300km with a designed flight time of up to 100 minutes.

-- Continued Trial Flights to Further Demonstrate AAV Technical Strength and Urban Air Mobility (UAM) Use Cases

As the first mover and industry leader with strong capabilities of autonomous flying, EHang with local partners continued trial and demo flights with the EHang 216 AAV series at multiple public events showcasing its practical uses. For example, its maiden flight in Japan was successfully completed with the local partner in June with Japans first outdoor open airspace trial flight permission granted to a passenger-grade AAV. In April, the EHang 216 made an impressive debut at the Chinese Super League in Guangzhou by flying into the opening ceremony carrying a representative holding the championship trophy. In June, EHang participated in the anti-COVID-19 campaign in Guangzhou by transporting emergency supplies to quarantine areas using the EHang 216 and the EHang 216L AAVs.

Recent Developments

-- Completion of the EHang 216Fs Technical Examination and Urban Fire Rescue Drills in China

In July, EHang completed a comprehensive 10-month technical examination on the EHang 216F and 52 different types of tests by the China National Fire-Fighting Equipment Quality Supervision Testing Center, which is under the Ministry of Emergency Management of China. In August following the examination, the EHang 216F AAVs were utilized by the local emergency and/or fire departments in several urban fire rescue drills in Chinas cities of Qingdao, Guangzhou and Hezhou. These have laid a solid foundation for the commercialization of EHang 216F AAVs.

-- Commencement of Operations in Yunfu Production Facility

EHangs new production facility in Yunfu, China commenced operations in June. It is approximately 24,000 square meters in gross floor area to house the major AAV production processes from manufacturing key components and carbon fiber composite airframes to AAV assembling and flight testing in designated function areas. It has a planned initial annual capacity of 600 units of passenger-grade AAVs.

The Investor Day, which was scheduled to be held at the new Yunfu production facility on August 18, 2021, had been unexpectedly and urgently called off by the local governmental authorities right before the event. This was due to the re-tightened travel and group gathering restrictions, as the newest COVID-19 cases of the Delta variant were identified in Guangzhou city, where the Companys main office is located, and other areas in China. The Company will continue to monitor the COVID-19 situation as it evolves, and communicate with investors and local authorities in a timely manner if the Yunfu Investor Day will be rescheduled to a later date.

CEO Remarks

In the second quarter, our quarterly gross margin increased to a record high of 68%, reflecting our growing competitive strengths and leadership position, said Mr. Huazhi Hu, EHangs Founder, Chairman and Chief Executive Officer. We made meaningful progresses toward the certification process and trial operations for our existing AAV products such as the EHang 216 and the EHang 216F, and further made our product and solution portfolio well-rounded for urban air mobility by introducing the new model VT-30.

Looking ahead, we will continue moving towards our long-term strategic goal of becoming a UAM platform operator through accumulating solid momentum as we are implementing the 100 Air Mobility Routes Initiative. With that goal in mind, we have so far targeted 15 self-run operation spots and another 21 spots run by our customers, mostly in Southern China. Meanwhile, we are making efforts to get ourselves ready for trial operations through production optimizations and the prioritizing certification process. We are confident in maintaining our leadership position and competitiveness among our industry peers in the burgeoning UAM market.

Second Quarter 2021 Financial Results

Revenues

Total revenues were RMB12.2 million (US$1.9 million), down 65.9% year over year with RMB35.7 million in the second quarter of 2020. The decrease was mainly due to the Companys strategic transition into a more operation platform-oriented model.

Costs of revenues

Costs of revenues were RMB3.9 million (US$0.6 million), down 74.3% year over year, primarily due to the change in the sales volume of AAV products and solutions.

Gross profit

Gross profit was RMB8.3 million (US$1.3 million), down 59.8% from RMB20.6 million in the second quarter of 2020.

Gross margin was 68.0%, up 10.4 percentage points from 57.6% in the second quarter of 2020. The increase was primarily due to higher margin of a command-and-control system for smart city management project completed in the second quarter of 2021.

Operating expenses

Total operating expenses were RMB85.3 million (US$13.2 million), up 96.5% from RMB43.4 million in the second quarter of 2020. Operating expense as a percentage of total revenues was 701.6%, compared with 121.7% in the second quarter of 2020. The increase in operating expenses was primarily due to the reasons discussed under the heading Adjusted operating expenses (non-GAAP) below and the total increase of RMB17.5 million (US$2.7 million) in share-based compensation expenses and the charges to sales and marketing expenses, general and administration expenses and research and development expenses were RMB1.4 million (US$0.2 million), RMB8.4 million (US$1.3 million) and RMB7.7 million (US$1.2 million), respectively.

Adjusted operating expenses3 (non-GAAP)

Adjusted operating expenses were RMB59.9 million (US$9.3 million), representing an increase of 69.0% from RMB35.4 million in the second quarter of 2020. Adjusted operating expenses as a percentage of total revenues was 492.0%, compared with 99.2% in the second quarter of 2020.

-- Adjusted sales and marketing expenses were RMB6.2 million (US$1.0 million), up 3.5% from RMB6.0 million in the second quarter of 2020. -- Adjusted general and administration expenses were RMB29.9 million (US$4.6 million), up 151.9% from RMB11.9 million in the second quarter of 2020. The increase was mainly due to the additional expenses related to extension of annual report filing and prudent provisions related to the COVID-19 impacts.

-- Adjusted research and development expenses were RMB23.8 million (US$3.7 million), up 35.2% from RMB17.5 million in the second quarter of 2020. The increase was mainly due to an increase in expenditure for developing new AAV models, including both passenger-grade and non-passenger-grade AAV models like VT-30, as well as increased R&D personnel expenses.

Operating loss

Operating loss was RMB74.9 million (US$11.6 million), compared with operating loss of RMB19.2 million in the second quarter of 2020. Operating loss as a percentage of total revenues was negative 615.8%, compared with negative 53.7% in the second quarter of 2020.

Adjusted operating loss (non-GAAP)

Adjusted operating loss was RMB49.4 million (US$7.7 million), compared with adjusted operating loss of RMB11.1 million in the second quarter of 2020. Adjusted operating loss as a percentage of total revenues was negative 406.3%, compared to negative 31.2% in the second quarter of 2020.

Net loss

Net loss was RMB74.6 million (US$11.6 million), compared with net loss of RMB19.7 million in the second quarter of 2020.

Adjusted net loss (non-GAAP)

Adjusted net loss was RMB49.1 million (US$7.6 million), compared with adjusted net loss of RMB11.7 million in the second quarter of 2020.

Adjusted net loss attributable to EHangs ordinary shareholders was RMB48.9 million (US$7.6 million).

Loss per share and per ADS

Basic and diluted net loss per ordinary share were both RMB0.67 (US$0.10). Adjusted basic and diluted net loss per ordinary share4 (non-GAAP) were both RMB0.44 (US$0.07).

Basic and diluted net loss per ADS were both RMB1.34 (US$0.20). Adjusted basic and diluted net loss per ADS5 (non-GAAP) were both RMB0.88 (US$0.14).

Business Outlook

The Companys revenue forecast for 2021 remains between RMB130 million and RMB180 million, as the Company strategically transitions into a more operation platform-oriented model and the commercialization of the EHang 216F, the firefighting model, among other AAVs.

The above outlook is based on information available as of the date of this press release and reflects the Companys current and preliminary expectations regarding its business situation and market conditions. The outlook is subject to change, especially considering uncertainties and situations related to how the COVID-19 pandemic further develops.

Conference Call

EHangs management team will host an earnings conference call at 8:00 AM on Wednesday, August 25, 2021, U.S. Eastern Time (8:00 PM on August 25, 2021, Beijing/Hong Kong Time).

Please register in advance for the conference using the link provided below and dial in 10 minutes before the conference is scheduled to begin. Conference access information will be provided upon registration.

Participant Online Registration: http://apac.directeventreg.com/registration/event/8598052.

A replay of the conference call may be accessed by phone at the following numbers until September 2, 2021. To access the replay, please reference the conference ID 8598052.

Phone NumberInternational +61 2 8199 0299United States +1 855 452 5696 +1 646 254 3697Hong Kong +852 800963117Mainland China +86 4006322162 +86 8008700205

A live and archived webcast of the conference call will be available on the companys investors relations website at http://ir.ehang.com/.

About EHang

EHang (Nasdaq: EH) is the world's leading autonomous aerial vehicle (AAV) technology platform company. EHangs mission is to make safe, autonomous, and eco-friendly air mobility accessible to everyone. EHang provides customers in various industries with AAV products and commercial solutions: urban air mobility (including passenger transportation and logistics), smart city management, and aerial media solutions. As the forerunner of cutting-edge AAV technologies and commercial solutions in the global Urban Air Mobility (UAM) industry, EHang continues to explore the boundaries of the sky to make flying technologies benefit our life in smart cities. For more information, please visit www.ehang.com.

Safe Harbor Statement

This press release contains statements that may constitute forward-looking statements pursuant to the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as will, expects, anticipates, aims, future, intends, plans, believes, estimates, likely to and similar statements. Management has based these forward-looking statements on its current expectations, assumptions, estimates and projections. While they believe these expectations, assumptions, estimates and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which are beyond management's control. These statements involve risks and uncertainties that may cause EHang's actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements.

Non-GAAPFinancial Measures

The Company uses adjusted gross profit, adjusted gross margin, adjusted operating loss, adjusted net loss, adjusted operating expenses, adjusted basic and diluted loss per ordinary share and adjusted basic and diluted loss per ADSs (the Non-GAAP Financial Measures) in evaluating its operating results and for financial and operational decision-making purposes. There was no income tax impact on the Companys non-GAAP adjustments because the non-GAAP adjustments are usually recorded in entities located in tax-free jurisdictions, such as the Cayman Islands.

The Company believes that the Non-GAAP Financial Measures help identify underlying trends in its business that could otherwise be distorted by the effects of items such as share-based compensation expenses that are included in their comparable GAAP measures. The Company believes that the Non-GAAP Financial Measures provide useful information about its operating results, enhance the overall understanding of its past performance and future prospects and allow for greater visibility with respect to key metrics used by its management members in their financial and operational decision-making.

Each of the Non-GAAP Financial Measures should not be considered in isolation or construed as an alternative to its comparable GAAP measure, operating profit margin and net margin or any other measure of performance or as an indicator of the Companys operating performance. Investors are encouraged to review the Companys most directly comparable GAAP measures in conjunction with the Non-GAAP Financial Measures. The Non-GAAP Financial Measures presented here may not be comparable to similarly titled measures presented by other companies. Other companies may calculate similarly titled measures differently, limiting their usefulness as comparative measures to the Companys data. The Company encourages investors and others to review its financial information in its entirety and not rely on a single financial measure.

Exchange Rate

This press release contains translations of certain RMB amounts into U.S. dollars (USD) at specified rates solely for the convenience of the reader. Unless otherwise stated, all translations from RMB to USD were made at the rate of RMB6.4566 to US$1.00, the noon buying rate in effect on June 30, 2021 in the H.10 statistical release of the Federal Reserve Board. The Company makes no representation that the RMB or USD amounts referred to could be converted into USD or RMB, as the case may be, at any particular rate or at all.

Statement Regarding Preliminary Unaudited Financial Information

The unaudited financial information set out in this earnings release is preliminary and subject to potential adjustments. Adjustments to the consolidated financial statements may be identified when audit work has been performed for the Companys year-end audit, which could result in significant differences from this preliminary unaudited financial information.

Investor Contact:ir@ehang.comIn the U.S.:Julia@blueshirtgroup.comIn China:Susie@blueshirtgroup.com

Media Contact:pr@ehang.com

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?))

As of As of December June 31, 2020 30, 2021 RMB RMB US$ (Unaudited) (Unaudited) ASSETS Current assets: Cash and cash equivalents 137,840 319,919 49,549 Restricted cash 2,333 - - Short-term investments 49,271 86,561 13,407 Accounts receivable, net 163,146 111,079 17,204 Cost and estimated earnings in excess of 717 717 111 billingsInventories, net 47,094 54,197 8,394 Prepayments and other current assets 21,421 31,257 4,840 Amount due from a related party 2,639 2,639 409 Total current assets 424,461 606,369 93,914 Non-current assets: Property and equipment, net 20,869 34,610 5,360 Intangible assets, net 1,062 868 134 Long term loans receivable 14,934 13,162 2,039 Long-term investments 2,919 2,919 452 Other non-current assets 20,304 3,306 512 Total non-current assets 60,088 54,865 8,497 Total assets 484,549 661,234 102,411 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities Short-term bank loans 15,000 10,000 1,549 Accounts payable 53,147 35,770 5,540 Contract liabilities 7,492 17,029 2,637 Accrued expenses and other liabilities 81,578 59,000 9,138 Deferred income 750 743 115 Deferred government subsidies 80 1,723 267 Total current liabilities 158,047 124,265 19,246 Non-current liabilities: Long-term bank loans - 20,000 3,098 Mandatorily redeemable non-controlling 40,000 40,000 6,195 interestsDeferred tax liabilities 292 292 45 Unrecognized tax benefit 5,480 5,480 849 Deferred income 2,970 2,572 398 Deferred government subsidies 60 20 3 Total non-current liabilities 48,802 68,364 10,588 Total liabilities 206,849 192,629 29,834

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?))

As of As of December June 31, 2020 30, 2021 RMB RMB US$ (Unaudited) (Unaudited)LIABILITIES AND SHAREHOLDERS? EQUITY (CONTINUED)Shareholders? equity: Class A ordinary shares 44 ?? 45 7 Class B ordinary shares 28 ?? 28 4 Additional paid-in capital 1,081,299 1,412,603 218,784 Statutory reserves 1,035 1,035 160 Accumulated deficit (808,038 ) (944,598 ) (146,300 )Accumulated other comprehensive income 1,950 (1,332 ) (206 )Total EHang Holdings Limited 276,318 467,781 72,449 shareholders? equityNon-controlling interests 1,382 824 128 Total shareholders? equity 277,700 468,605 72,577 Total liabilities and shareholders? 484,549 661,234 102,411 equity

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Total revenues 35,700 22,977 12,164 1,884 54,518 35,141 5,443 Costs of (15,147 ) (8,451 ) (3,897 ) (604 ) (22,811 ) (12,348 ) (1,912 )revenuesGross profit 20,553 14,526 8,267 1,280 31,707 22,793 3,531 Operating expenses:Sales andmarketing (9,218 ) (9,486 ) (10,762 ) (1,667 ) (14,994 ) (20,248 ) (3,136 )expensesGeneral andadministrative (16,348 ) (46,059 ) (42,809 ) (6,630 ) (26,956 ) (88,868 ) (13,764 )expensesResearch anddevelopment (17,870 ) (27,854 ) (31,769 ) (4,920 ) (34,530 ) (59,623 ) (9,234 )expensesTotaloperating (43,436 ) (83,399 ) (85,340 ) (13,217 ) (76,480 ) (168,739 ) (26,134 )expenses Otheroperating 3,724 2,667 2,163 335 4,493 4,830 748 incomeOperating loss (19,159 ) (66,206 ) (74,910 ) (11,602 ) (40,280 ) (141,116 ) (21,855 ) Other income/ (expense):Interest andinvestment 974 1,957 561 87 2,386 2,518 390 incomeInterest (488 ) (394 ) (474 ) (73 ) (976 ) (868 ) (134 )expensesForeignexchange gain/ 278 (306 ) 38 6 7 (268 ) (42 )(loss)Other income 244 2,876 192 30 325 3,068 475 Other expense (1,689 ) (335 ) - - (1,689 ) (335 ) (52 )Total other(expense)/ (681 ) 3,798 317 50 53 4,115 637 income Loss beforeincome tax andshare of net (19,840 ) (62,408 ) (74,593 ) (11,552 ) (40,227 ) (137,001 ) (21,218 )loss from anequityinvesteeIncome taxbenefits/ 145 (117 ) - - 145 (117 ) (18 )(expenses)Loss beforeshare of netloss from an (19,695 ) (62,525 ) (74,593 ) (11,552 ) (40,082 ) (137,118 ) (21,236 )equityinvesteeShare of netloss from an (33 ) - - - (52 ) - - equityinvesteeNet loss (19,728 ) (62,525 ) (74,593 ) (11,552 ) (40,134 ) (137,118 ) (21,236 )

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net loss (19,728 ) (62,525 ) (74,593 ) (11,552 ) (40,134 ) (137,118 ) (21,236 )Net lossattributable to 1,111 361 197 31 1,967 558 86 non-controllinginterestsNet lossattributable to (18,617 ) (62,164 ) (74,396 ) (11,521 ) (38,167 ) (136,560 ) (21,150 )ordinaryshareholdersNet loss perClass A and Class Bordinary share:Basic and (0.17 ) (0.56 ) (0.67 ) (0.10 ) (0.35 ) (1.23 ) (0.19 )dilutedShares used innet loss perClass A andClass B ordinary sharecomputation (inthousands ofshares):Basic and 109,548 110,475 110,858 110,858 109,507 110,668 110,668 dilutedLoss per ADS (2ordinary sharesequal to 1 ADS) (0.34 ) (1.12 ) (1.34 ) (0.20 ) (0.70 ) (2.46 ) (0.38 )Basic anddiluted

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$"))

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWSFROM OPERATINGACTIVITIESNet loss (19,728 ) (62,525 ) (74,593 ) (11,552 ) (40,134 ) (137,118 ) (21,236 )Adjustmentsto reconcilenet loss tonet cash (used in)/provided byoperatingactivities:Depreciationand 1,620 1,319 2,134 331 3,190 3,453 535 AmortizationShare-based 8,012 48,871 25,489 3,948 9,948 74,360 11,517 compensationLoss/(gain)on disposalof property 228 - (27 ) (4 ) 228 (27 ) (4 )andequipmentShare of netloss from an 33 - - - 52 - - equityinvesteeInvestmentincome from - (1,729 ) - - - (1,729 ) (268 )short-terminvestmentsAllowancefor doubtful 3,727 505 5,869 909 3,869 6,374 987 accounts Changes inoperating assets andliabilities:Accounts (30,900 ) 54,542 (8,220 ) (1,273 ) (39,991 ) 46,322 7,174 receivableUnbilled - - - - 1,481 - - revenueCost andestimatedearnings in - - - - 10,490 - - excess ofbillingsInventories (18,868 ) 318 (10,849 ) (1,680 ) (30,021 ) (10,531 ) (1,631 )Prepaymentsand other 1,388 (7,127 ) (5,151 ) (798 ) (373 ) (12,278 ) (1,902 )currentassetsOthernon-current 21 - - - 43 - - assetsAccounts 11,446 (17,789 ) 412 64 14,142 (17,377 ) (2,692 )payableContract (170 ) 1,613 (1,476 ) (230 ) (3,513 ) 137 21 liabilitiesIncome taxes - - - - (5 ) - - payableDeferred - 1,730 (492 ) (76 ) - 1,238 192 incomeDeferredgovernment (20 ) (20 ) (20 ) (3 ) (40 ) (40 ) (6 )subsidiesUnrecognized (151 ) - - - (180 ) - - tax benefitsAccruedexpenses and (1,387 ) (3,534 ) 7,548 1,168 (2,990 ) 4,014 622 otherliabilitiesNet cash(used in)/provided by (44,749 ) 16,174 (59,376 ) (9,196 ) (73,804 ) (43,202 ) (6,691 )operatingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$"))

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWSFROM INVESTINGACTIVITIESPurchase ofproperty (866 ) (8,322 ) (3,732 ) (578 ) (1,158 ) (12,054 ) (1,867 )andequipmentDisposal ofproperty 192 - - - 192 - - andequipmentAcquisitionof (269 ) (9 ) (11 ) (2 ) (278 ) (20 ) (3 )intangibleassetsProceedsfrommaturity of 2,500 49,271 56,600 8,766 15,500 105,871 16,397 short-terminvestmentsPurchase ofshort-term (19,899 ) (18,000 ) (125,161 ) (19,385 ) (37,099 ) (143,161 ) (22,173 )investmentsLoans tothird - - - - (53,900 ) - - partiesRepaymentof loan - - - - 10,000 - - from athird partyOthers - - - - (54 ) - - Net cashflow (usedin)/ (18,342 ) 22,940 (72,304 ) (11,199 ) (66,797 ) (49,364 ) (7,646 )provided byinvestingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$"))

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWS FROMFINANCING ACTIVITIESProceeds fromshort-term bank 5,000 5,000 - - 10,000 5,000 774 loansRepayment ofshort-term bank - (5,000 ) (5,000 ) (774 ) (5,000 ) (10,000 ) (1,549 )loansProceeds fromlong-term bank - 20,000 - 20,000 3,098 loansProceeds fromissuance ofmandatorilyredeemable 40,000 - - - 40,000 - - non-controllinginterests of asubsidiaryProceeds fromissuance ofsubsidiaries?equity to 2,023 - - - 2,023 - - non-controllinginterestholdersProceeds fromissuance ofClass Aordinary sharespursuant to - - - - 7,313 - - underwriters?exercise ofover-allotmentoptionProceeds fromthe issuance ofClass Aordinary shares - 258,836 - - - 258,836 40,089 pursuant to aprivateplacementPayment ofissuance ofClass Aordinary sharespursuant to - - - - (516 ) - - underwriters?exercise ofover-allotmentoption?sissuance costsPayment ofissuance costs (304 ) - - - (9,423 ) - - for initialpublic offeringNet cashprovided by/(used in) 46,719 278,836 (5,000 ) (774 ) 44,397 273,836 42,412 financingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars ("US$"))

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Effect ofexchangeratechanges oncash, cash (454 ) 4,351 (5,875 ) (910 ) 2,731 (1,524 ) (236 )equivalentsandrestrictedcashNet(decrease)/increase incash, cash (16,826 ) 322,301 (142,555 ) (22,079 ) (93,473 ) 179,746 27,839 equivalentsandrestrictedcashCash, cashequivalentsandrestricted 245,015 140,173 462,474 71,628 321,662 140,173 21,710 cash at thebeginningof theperiod/yearCash, cashequivalentsandrestricted 228,189 462,474 319,919 49,549 228,189 319,919 49,549 cash at theend of theperiod/year

Non-cash financingactivities:Unpaid issuancecost for Series Credeemable 743 48 48 7 743 48 7 convertiblepreferred sharesincluded in Accruedexpenses and otherliabilitiesUnpaid issuancecosts for initialpublic offering 5,304 821 821 127 5,304 821 127 included in Accruedexpenses and otherliabilitiesUnpaid issuancecosts for issuanceof Class A ordinaryshares pursuant tounderwriters?exercise of 1,046 812 812 126 1,046 812 126 over-allotmentoption included inAccrued expensesand otherliabilitiesUnpaid Issuancecosts for issuanceof Class A ordinaryshares pursuant to 1,891 1,891 293 1,891 293 private placementsincluded in Accruedexpenses and otherliabilities

EHANG HOLDINGS LIMITEDCONDENSED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Gross profit 20,553 14,526 8,267 1,280 31,707 22,793 3,531 Plus:Share-based - - - - - - - compensationAdjusted gross 20,553 14,526 8,267 1,280 31,707 22,793 3,531 profitAdjusted gross 57.6 % 63.2 % 68.0 % 68.0 % 58.2 % 64.9 % 64.9 %profit margin Sales andmarketing (9,218 ) (9,486 ) (10,762 ) (1,667 ) (14,994 ) (20,248 ) (3,136 )expensesPlus:Share-based 3,242 4,626 4,578 709 3,242 9,204 1,426 compensationAdjusted salesand marketing (5,976 ) (4,860 ) (6,184 ) (958 ) (11,752 ) (11,044 ) (1,710 )expenses General andadministrative (16,348 ) (46,059 ) (42,809 ) (6,630 ) (26,956 ) (88,868 ) (13,764 )expensesPlus:Share-based 4,478 36,331 12,910 2,000 5,923 49,241 7,626 compensationAdjustedgeneral and (11,870 ) (9,728 ) (29,899 ) (4,630 ) (21,033 ) (39,627 ) (6,138 )administrativeexpenses Research anddevelopment (17,870 ) (27,854 ) (31,769 ) (4,920 ) (34,530 ) (59,623 ) (9,234 )expensesPlus:Share-based 292 7,914 8,001 1,239 783 15,915 2,465 compensationAdjustedresearch and (17,578 ) (19,940 ) (23,768 ) (3,681 ) (33,747 ) (43,708 ) (6,769 )developmentexpenses Operating (43,436 ) (83,399 ) (85,340 ) (13,217 ) (76,480 ) (168,739 ) (26,134 )expensesPlus:Share-based 8,012 48,871 25,489 3,948 9,948 74,360 11,517 compensationAdjustedoperating (35,424 ) (34,528 ) (59,851 ) (9,269 ) (66,532 ) (94,379 ) (14,617 )expensesAdjustedoperating 99.2 % 150.3 % 492.0 % 492.0 % 122.0 % 268.6 % 268.6 %expensespercentage Operating loss (19,159 ) (66,206 ) (74,910 ) (11,602 ) (40,280 ) (141,116 ) (21,855 )Plus:Share-based 8,012 48,871 25,489 3,948 9,948 74,360 11,517 compensationAdjusted (11,147 ) (17,335 ) (49,421 ) (7,654 ) (30,332 ) (66,756 ) (10,338 )operating lossAdjustedoperating (31.2 %) (75.4 %) (406.3 %) (406.3 %) (55.6 %) (190.0 %) (190.0 %)margin

EHANG HOLDINGS LIMITEDCONDENSED RECONCILIATIONS OF GAAP AND NON-GAAP RESULTS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?) except fornumber of shares and per share data)

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2020 2021 2021 2020 2021 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net loss (19,728 ) (62,525 ) (74,593 ) (11,552 ) (40,134 ) (137,118 ) (21,236 )Plus:Share-based 8,012 48,871 25,489 3,948 9,948 74,360 11,517 compensationAdjusted net (11,716 ) (13,654 ) (49,104 ) (7,604 ) (30,186 ) (62,758 ) (9,719 )lossAdjusted net (32.8 %) (59.4 %) (403.7 %) (403.7 %) (55.4 %) (178.6 %) (178.6 %)margin Net lossattributable (18,617 ) (62,164 ) (74,396 ) (11,521 ) (38,167 ) (136,560 ) (21,150 )to ordinaryshareholdersPlus:Share-based 8,012 48,871 25,489 3,948 9,948 74,360 11,517 compensationAdjusted netlossattributable (10,605 ) (13,293 ) (48,907 ) (7,573 ) (28,219 ) (62,200 ) (9,633 )to ordinaryshareholdersAdjusted netincomeattributable (29.7 %) (57.9 %) (402.1 %) (402.1 %) (51.8 %) (177.0 %) (177.0 %)to ordinaryshareholdersmargin Adjustedbasic anddiluted netloss per (0.10 ) (0.12 ) (0.44 ) (0.07 ) (0.26 ) (0.56 ) (0.09 )Class A andClass BordinaryshareAdjustedbasic and (0.20 ) (0.24 ) (0.88 ) (0.14 ) (0.52 ) (1.12 ) (0.18 )diluted netloss per ADS

_______________________1 Adjusted operating loss is a non-GAAP financial measure, which is defined as operating loss excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.2 Adjusted net loss is a non-GAAP financial measure, which is defined as net loss excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.3 Adjusted operating expenses is a non-GAAP financial measure, which is defined as operating expenses excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.4 Adjusted basic and diluted loss per ordinary share is a non-GAAP financial measure, which is defined as basic and diluted loss per ordinary share excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.5 Adjusted basic and diluted loss per ADS is a non-GAAP financial measure, which is defined as basic and diluted loss per ADS excluding share-based compensation expenses. See Non-GAAP Financial Measures at the end of this press release.