GlobeNewswire Inc | Aug 25, 2020 06:00AM EDT

August 25, 2020

- Continues Significant Growth Despite Pandemic Challenges- Maintains High Gross Margin

GUANGZHOU, China, Aug. 25, 2020 (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, 2020.

Second Quarter 2020 Highlights

Financial and Operational Highlights

-- Total revenues were RMB35.7 million (US$5.1 million), up 62.7% year over year, driven by significant growth across all revenue streams. Air mobility solutions contributed 63.5% of the total revenues in the second quarter of 2020. -- Gross margin was 57.6%, a slight decrease of 0.9 percentage point year over year due to change in revenue mix. Gross profit was RMB20.6 million (US$2.9 million), an increase of 60.0% year over year. -- Operating loss was RMB19.2 million (US$2.7 million), compared with operating loss of RMB16.7 million in the second quarter of 2019. -- Adjusted operating loss1 (non-GAAP) was RMB11.1 million (US$1.6 million), compared with adjusted operating loss of RMB11.8 million in the second quarter of 2019. -- Net loss was RMB19.7 million (US$2.8 million), compared with net loss of RMB16.3 million in the second quarter of 2019. -- Adjusted net loss2 (non-GAAP) was RMB11.7 million (US$1.7 million), compared with adjusted net loss of RMB11.4 million in the second quarter of 2019. -- Sales of the EHang 216, the Companys flagship passenger-grade AAV, reached 16 units in the second quarter of 2020, versus 14 units in the second quarter of 2019.

Business Highlights

-- Achieved the worlds first commercial pilot operation approval of passenger-grade AAVs for air logistics: In May 2020, EHang became the worlds first AAV company approved by a national aviation authority, the Civil Aviation Administration of China (CAAC), to carry out commercial pilot operation in the category of 150 kg plus heavy-lift air logistics uses. This approval was based on a pioneering regulation for specific unmanned aircraft under the globally-recognized Specific Operation Risk Assessment (SORA) framework of the Joint Authorities for Rulemaking of Unmanned Systems (JARUS). Starting from trial air logistics operations in Taizhou, China, the Company intends to gradually expand this use case to more locations in China. -- Deployed a new command-and-control center for smart city management in China: EHang completed deployment of a command-and-control center for smart city management in the city of Hezhou, China. This was the third of its kind after those in the cities of Shaoguan and Lianyungang. This deployment demonstrates EHangs capability in sophisticated centralized command-and-control systems that are designed ultimately for Urban Air Mobility (UAM) uses. -- Entered into a strategic partnership for air tourism: In May 2020, EHang partnered with LN Holdings, a Shenzhen-listed (000524.SZ) tourism platform company to announce the worlds first UAM-themed hotel at the LN Garden Hotel in Guangzhou, China. A variety of air tourism services using EHang AAVs are planned for the hotel, such as aerial sightseeing, transportation, air logistics, and aerial media light shows. -- Implemented smart city management solutions for flood emergency response: In April 2020, EHang conducted large-scale AAV flight operations efficiently and autonomously to air drop relief supplies and perform remote air inspection in a flood response exercise in Shaoguan, China. -- Appointed Mr. Dongming Wu, CEO of DHL Express China, as an independent director: Mr. Wu is the CEO of DHL Express China and a Global Management Board Member of DHL Express. With over 30 years of experience in the global delivery and logistics industry, Mr. Wu helps facilitate the Companys strategic development, especially in air logistics, and helps enhance the Companys corporate governance.

Mr. Huazhi Hu, EHangs Founder, Chairman and Chief Executive Officer, commented: During the second quarter of 2020, we significantly grew revenues and strengthened our core business of air mobility solutions, despite the ongoing COVID-19 pandemic challenges in China and overseas. We set a significant regulatory milestone for the industry by achieving the worlds first commercial operation approval of passenger-grade AAVs for air logistics from the CAAC. We are well-prepared and confident that we can accelerate growth by deploying our AAV solutions for more practical uses and expect to roll out more new products including the ones with the flight range exceeding 100 kilometers. We are proud of our continued progress in global markets.

Second Quarter 2020 Financial Results

Total Revenues

Total revenues were RMB35.7 million (US$5.1 million), up 62.7% year over year, growing across all revenue streams. Air mobility solutions represented 63.5% of total revenues in the second quarter of 2020. Sales of the EHang 216, the Companys flagship passenger-grade AAV, reached 16 units compared with 14 units in the same period of 2019.

Costs of revenues

Costs of revenues were RMB15.1 million (US$2.1 million), up 66.4% year over year. The increase tracked growth in revenues.

Gross profit

Gross profit was RMB20.6 million (US$2.9 million), up 60.0% from RMB12.8 million in the second quarter of 2019.

Gross margin was 57.6%, down 0.9 percentage points from 58.5% in the second quarter of 2019. The slight decrease in gross margin was mainly due to changes in revenue mix.

Operating expenses

Total operating expenses were RMB43.4 million (US$6.1 million), up 46.2% from RMB29.7 million in the second quarter of 2019. Operating expenses as a percentage of total revenues were 121.7%, 13.7 percentage points lower when compared with 135.4% in the second quarter of 2019. The increase in operating expenses were primarily due to higher research and development expenses related to continuous product development and increased general and administrative expenses.

-- Sales and marketing expenses were RMB9.2 million (US$1.3 million), up 21.8% from RMB7.6 million in the second quarter of 2019. It was mainly due to the operation expansion in European markets. -- General and administration expenses were RMB16.3 million (US$2.3 million), up 77.4% from RMB9.2 million in the second quarter of 2019. The increase was mainly due to the additional expenses related to being a public company and the additional provisions to take a prudent position in light of COVID-19 evolvement. -- Research and development expenses were RMB17.9 million (US$2.5 million), up 38.2% from RMB12.9 million in the second quarter of 2019. The increase was mainly due to continued investment in new model development, as the Company prepares new versions of passenger-grade AAV and non-passenger-grade AAV products such as the newly-announced firefighting version of EHang 216, EHang 216F, as well as related operating systems with enhanced functionalities.

Adjusted operating expenses3 (non-GAAP)

Adjusted operating expenses were RMB35.4 million (US$5.0 million), representing an increase of 41.9% from RMB25.0 million in the second quarter of 2019. Adjusted operating expenses as a percentage of total revenues were 99.2%, compared with 113.8% in the second quarter of 2019.

Operating loss

Operating loss was RMB19.2 million (US$2.7 million), compared with operating loss of RMB16.7 million in the second quarter of 2019. Operating margin was negative 53.7%, compared with negative 76.1% in the second quarter of 2019.

Adjusted operating loss (non-GAAP)

Adjusted operating loss was RMB11.1 million (US$1.6 million) compared with adjusted operating loss of RMB11.8 million in the second quarter of 2019. Adjusted operating margin was negative 31.2%, compared to negative 54.0% in the second quarter of 2019.

Net loss

Net loss was RMB19.7 million (US$2.8 million) compared with net loss of RMB16.3 million in the second quarter of 2019. Net margin was negative 55.3%, compared with negative 74.3% in the second quarter of 2019.

Adjusted net loss (non-GAAP)

Adjusted net loss was RMB11.7 million (US$1.7 million) compared with adjusted net loss of RMB11.4 million in the second quarter of 2019. Adjusted net margin was negative 32.8%, compared to negative 52.1% in the second quarter of 2019.

Adjusted net loss attributable to EHangs ordinary shareholders was RMB10.6 million (US$1.5 million) with an adjusted net margin of negative 29.7%, compared to negative 47.0% in the second quarter of 2019.

Loss per share and per ADS

Basic and diluted net loss per ordinary share were both RMB0.17 (US$0.02). Adjusted basic and diluted net loss per ordinary share4 (non-GAAP) were both RMB0.10 (US$0.01).

Basic and diluted net loss per ADS were both RMB0.34 (US$0.04). Adjusted basic and diluted net loss per ADS5 (non-GAAP) were both RMB0.20 (US$0.02).

Business Outlook

The Company maintains its forecast of at least 200% growth in annual revenues in 2020 based on the current momentums in economic recovery and the expectations of no further major interruptions impacted by COVID-19. The Company is confident in its long-term growth outlook given the growing number of practical uses for AAVs in the global UAM market, especially in China.

The above outlook is based on information available as of the date of this press release and reflects the Companys current and preliminary expectations, which are subject to change in light of uncertainties and situations related to how COVID-19 develops.

Conference Call

EHangs management team will host an earnings conference call at 8:00 AM on Tuesday, August 25, 2020, U.S. Eastern Time (8:00 PM on August 25, 2020, Beijing/Hong Kong Time).

To join the conference, please register in advance using the link below. Conference access information will be provided upon registration.

Participant Online Registration: http://apac.directeventreg.com/registration/event/6470385

A replay of the conference call may be accessed by phone at the following numbers until September 1, 2020. To access the replay, please reference the conference ID 6470385.

Phone NumberInternational +61 2 8199-0299United States +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 investor 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: 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 operating loss, adjusted net loss, adjusted operating expenses, adjusted basic and diluted net loss per ordinary share and adjusted basic and diluted net 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 RMB7.0651 to US$1.00, the noon buying rate in effect on June 30, 2020 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.com

In the U.S.:Julia@blueshirtgroup.com In China:Susie@blueshirtgroup.com

Media Contact:pr@ehang.com

_________________________

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 net loss per ordinary share is a non-GAAP financial measure, which is defined as basic and diluted net loss per ordinary share excluding share-based compensation expenses and accretion to redemption value of redeemable convertible preferred shares. See Non-GAAP Financial Measures at the end of this press release.

5 Adjusted basic and diluted net loss per ADS is a non-GAAP financial measure, which is defined as basic and diluted net loss per ADS excluding share-based compensation expenses and accretion to redemption value of redeemable convertible preferred shares. See Non-GAAP Financial Measures at the end of this press release.

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?)) As of As of December31, June30, 2019 2020 RMB RMB US$ (Unaudited) (Unaudited)ASSETS Current assets: Cash and cash equivalents 321,662 228,189 32,298Short-term investments 7,674 29,542 4,181Accounts receivable, net 41,103 76,575 10,838Unbilled revenue 4,807 2,800 396Cost and estimated earnings in 14,212 3,722 527excess of billingsInventories 18,490 47,846 6,772Prepayments and other current assets 20,565 20,175 2,855Total current assets 428,513 408,849 57,867 Non-current assets: Property and equipment, net 16,272 13,534 1,916Intangible assets, net 1,209 1,295 183Long term loans receivable - 44,616 6,315Long-term investments 2,983 2,931 415Deferred tax assets 184 184 26Other non-current assets 252 209 30Total non-current assets 20,900 62,769 8,885 Total assets 449,413 471,618 66,752 LIABILITIES AND SHAREHOLDERS? EQUITY Current liabilities Short-term bank loans 5,000 10,000 1,416Accounts payable 27,285 40,678 5,758Contract liabilities 9,918 6,405 907Accrued expenses and other 53,310 41,675 5,899liabilitiesDeferred government subsidies 80 80 11Income taxes payable 5 - -Total current liabilities 95,598 98,838 13,991 Non-current liabilities: Long-term loans 32,534 31,078 4,398Mandatorily redeemable - 40,000 5,662non-controlling interestsDeferred tax liabilities 292 292 41Unrecognized tax benefit 5,494 5,314 752Deferred government subsidies 140 100 14Total non-current liabilities 38,460 76,784 10,867 Total liabilities 134,058 175,622 24,858

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED BALANCE SHEETS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars (?US$?)) As of As of December31, June30, 2019 2020 RMB RMB US$ (Unaudited) (Unaudited)LIABILITIES AND SHAREHOLDERS? EQUITYShareholders? equity: Class A ordinary shares ?? 44 ?? 44 ?? 6 Class B ordinary shares ?? 28 ?? 28 ?? 4 Additional paid-in capital 1,020,691 1,036,390 146,691 Statutory reserves 1,035 1,035 146 Accumulated deficit (720,419 ) (758,586 ) (107,371 )Accumulated other comprehensive 10,195 13,248 1,875 incomeTotal EHang Holdings Limited 311,574 292,159 41,351 shareholders? equityNon-controlling interests 3,781 3,837 543 Total shareholders? equity 315,355 295,996 41,894 Total liabilities and 449,413 471,618 66,752 shareholders? equity

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

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Total revenues 21,946 18,818 35,700 5,053 32,385 54,518 7,717 Costs of (9,101 ) (7,664 ) (15,147 ) (2,144 ) (13,434 ) (22,811 ) (3,229 )revenuesGross profit 12,845 11,154 20,553 2,909 18,951 31,707 4,488 Operating expenses:Sales andmarketing (7,570 ) (5,776 ) (9,218 ) (1,305 ) (12,536 ) (14,994 ) (2,122 )expensesGeneral andadministrative (9,213 ) (10,608 ) (16,348 ) (2,314 ) (17,892 ) (26,956 ) (3,815 )expensesResearch anddevelopment (12,931 ) (16,660 ) (17,870 ) (2,529 ) (27,576 ) (34,530 ) (4,887 )expensesTotaloperating (29,714 ) (33,044 ) (43,436 ) (6,148 ) (58,004 ) (76,480 ) (10,824 )expenses Otheroperating 163 769 3,724 527 1,143 4,493 636 incomeOperating loss (16,706 ) (21,121 ) (19,159 ) (2,712 ) (37,910 ) (40,280 ) (5,700 ) Other income/ (expense):Interest 417 1,412 974 138 496 2,386 338 incomeInterest (158 ) (488 ) (488 ) (69 ) (299 ) (976 ) (138 )expensesForeignexchange gain/ 104 (271 ) 278 39 36 7 1 (loss)Other income 100 81 244 35 153 325 46 Other expense - - (1,689 ) (239 ) (26 ) (1,689 ) (239 )Total otherincome/ 463 734 (681 ) (96 ) 360 53 8 (expense) Loss beforeincome tax andshare of net (16,243 ) (20,387 ) (19,840 ) (2,808 ) (37,550 ) (40,227 ) (5,692 )loss from anequityinvesteeIncome tax(expenses)/ (52 ) - 145 21 (78 ) 145 21 benefitsLoss beforeshare of netloss from an (16,295 ) (20,387 ) (19,695 ) (2,787 ) (37,628 ) (40,082 ) (5,671 )equityinvesteeShare of netloss from an (5 ) (19 ) (33 ) (5 ) (10 ) (52 ) (7 )equityinvesteeNet loss (16,300 ) (20,406 ) (19,728 ) (2,792 ) (37,638 ) (40,134 ) (5,678 )

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

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net loss (16,300 ) (20,406 ) (19,728 ) (2,792 ) (37,638 ) (40,134 ) (5,678 )Net lossattributable to 1,137 856 1,111 157 1,418 1,967 278 non-controllinginterestsNet lossattributable to (15,163 ) (19,550 ) (18,617 ) (2,635 ) (36,220 ) (38,167 ) (5,400 )EHang HoldingsLimitedAccretion toredemptionvalue ofredeemable (1,559 ) - - - (3,034 ) - - convertiblepreferredsharesNet lossattributable to (16,722 ) (19,550 ) (18,617 ) (2,635 ) (39,254 ) (38,167 ) (5,400 )ordinaryshareholdersNet loss per ordinary share: Basic and (0.29 ) (0.69 ) dilutedNet loss perClass A and Class Bordinary share:Basic and (0.18 ) (0.17 ) (0.02 ) (0.35 ) (0.05 )dilutedShares used innet loss pershare computation (in thousands ofshares):Basic and 56,792 56,792 dilutedShares used innet loss perClass A andClass B ordinary sharecomputation (inthousands ofshares):Basic and 109,066 109,227 109,227 109,189 109,189 dilutedLoss per ADS (2ordinary shares equal to 1 ADS)Basic and (0.36 ) (0.34 ) (0.04 ) (0.70 ) (0.10 )diluted

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, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Gross profit 12,845 11,154 20,553 2,909 18,951 31,707 4,488 Plus:Share-based 116 - - - 294 - - compensationAdjusted 12,961 11,154 20,553 2,909 19,245 31,707 4,488 gross profitAdjusted 59.1 % 59.3 % 57.6 % 57.6 % 59.4 % 58.2 % 58.2 %gross margin Operating (29,714 ) (33,044 ) (43,436 ) (6,148 ) (58,004 ) (76,480 ) (10,824 )expensesPlus:Share-based 4,742 1,936 8,012 1,134 9,618 9,948 1,408 compensationAdjustedoperating (24,972 ) (31,108 ) (35,424 ) (5,014 ) (48,386 ) (66,532 ) (9,416 )expensesAdjustedoperating 113.8 % 165.3 % 99.2 % 99.2 % 149.4 % 122.0 % 122.0 %expensespercentage Operating (16,706 ) (21,121 ) (19,159 ) (2,712 ) (37,910 ) (40,280 ) (5,700 )lossPlus:Share-based 4,858 1,936 8,012 1,134 9,912 9,948 1,408 compensationAdjustedoperating (11,848 ) (19,185 ) (11,147 ) (1,578 ) (27,998 ) (30,332 ) (4,292 )lossAdjustedoperating (54.0 %) (102.0 %) (31.2 %) (31.2 %) (86.5 %) (55.6 %) (55.6 %)margin Net loss (16,300 ) (20,406 ) (19,728 ) (2,792 ) (37,638 ) (40,134 ) (5,678 )Plus:Share-based 4,858 1,936 8,012 1,134 9,912 9,948 1,408 compensationAdjusted net (11,442 ) (18,470 ) (11,716 ) (1,658 ) (27,726 ) (30,186 ) (4,270 )lossAdjusted net (52.1 %) (98.2 %) (32.8 %) (32.8 %) (85.6 %) (55.4 %) (55.4 %)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, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)Net lossattributable (16,722 ) (19,550 ) (18,617 ) (2,635 ) (39,254 ) (38,167 ) (5,400 )to ordinaryshareholdersPlus:Share-based 4,858 1,936 8,012 1,134 9,912 9,948 1,408 compensationPlus:Accretion toredemptionvalue of 1,559 - - - 3,034 - - redeemableconvertiblepreferredsharesAdjusted netlossattributable (10,305 ) (17,614 ) (10,605 ) (1,501 ) (26,308 ) (28,219 ) (3,992 )to ordinaryshareholdersAdjusted netincomeattributable (47.0 %) (93.6 %) (29.7 %) (29.7 %) (81.2 %) (51.8 %) (51.8 %)to ordinaryshareholdersmargin Adjustedbasic anddiluted net (0.18 ) - - - (0.46 ) - - loss pershareAdjustedbasic anddiluted netloss per - (0.16 ) (0.10 ) (0.01 ) - (0.26 ) (0.04 )Class A andClass BordinaryshareAdjustedbasic and - (0.32 ) (0.20 ) (0.02 ) - (0.52 ) (0.08 )diluted netloss per ADS

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

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWSFROM OPERATINGACTIVITIESNet loss (16,300 ) (20,406 ) (19,728 ) (2,792 ) (37,638 ) (40,134 ) (5,678 )Adjustmentsto reconcilenet loss tonet cash used inoperatingactivities:Depreciationand 1,366 1,570 1,620 229 2,797 3,190 451 AmortizationShare-based 4,858 1,936 8,012 1,134 9,912 9,948 1,408 compensationLoss ondisposal of - - 228 32 - 228 32 property andequipmentShare of netloss from an 5 19 33 5 10 52 7 equityinvestee(Reversal)allowance 5 142 3,727 528 (210 ) 3,869 548 for doubtfulaccounts Changes inoperating assets andliabilities:Accounts (7,122 ) (9,091 ) (30,900 ) (4,375 ) (10,508 ) (39,991 ) (5,661 )receivableUnbilled - 1,481 - - - 1,481 210 revenueCost andestimatedearnings in - 10,490 - - 3,247 10,490 1,485 excess ofbillingsInventories (2,841 ) (11,153 ) (18,868 ) (2,671 ) (4,804 ) (30,021 ) (4,249 )Prepaymentsand other 1,471 (1,761 ) 1,388 196 (2,050 ) (373 ) (53 )currentassetsOthernon-current 14 22 21 3 29 43 6 assetsAccounts 2,231 2,696 11,446 1,621 2,468 14,142 2,002 payableContract (7,014 ) (3,343 ) (170 ) (24 ) (4,292 ) (3,513 ) (497 )liabilitiesIncome taxes (26 ) (5 ) - - - (5 ) (1 )payableDeferredgovernment (20 ) (20 ) (20 ) (3 ) (40 ) (40 ) (6 )subsidiesUnrecognized - (29 ) (151 ) (21 ) - (180 ) (26 )tax benefitsAccruedexpenses and 2,147 (1,603 ) (1,387 ) (196 ) 1,188 (2,990 ) (422 )otherliabilitiesNet cashused in (21,226 ) (29,055 ) (44,749 ) (6,334 ) (39,891 ) (73,804 ) (10,444 )operatingactivities

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

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWSFROM INVESTINGACTIVITIESPurchase ofproperty (217 ) (292 ) (866 ) (123 ) (862 ) (1,158 ) (165 )andequipmentDisposal ofproperty - - 192 27 - 192 27 andequipmentAcquisitionof - (9 ) (269 ) (38 ) - (278 ) (39 )intangibleassetsProceedsfrommaturity of 11,100 13,000 2,500 354 14,400 15,500 2,194 short-terminvestmentsPurchase ofshort-term (10,000 ) (17,200 ) (19,899 ) (2,817 ) (22,900 ) (37,099 ) (5,252 )investmentsLoans tothird - (53,900 ) - - - (53,900 ) (7,629 )partiesRepaymentof loanreceivable - 10,000 - - - 10,000 1,416 from athird partyLoan to arelated - - - - (425 ) - - partyRepaymentof loanfrom a - - - - 425 - - relatedpartyOthers - (54 ) - - - (54 ) (8 )Net cashflowprovided by 883 (48,455 ) (18,342 ) (2,597 ) (9,362 ) (66,797 ) (9,456 )/(used in)investingactivities

EHANG HOLDINGS LIMITEDCONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (CONT?D)(Amounts in thousands of Renminbi (?RMB?) and US dollars ("USD")) Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited)CASH FLOWS FROMFINANCING ACTIVITIESProceeds fromshort-term bank - 5,000 5,000 708 5,000 10,000 1,416 loansRepayment of ashort-term bank - (5,000 ) - - (5,000 ) (5,000 ) (708 )loanProceeds fromissuance ofmandatorilyredeemable - - 40,000 5,662 - 40,000 5,662 non-controllinginterests of asubsidiaryProceeds fromissuance ofsubsidiaries?equity to - - 2,023 286 - 2,023 286 non-controllinginterestholdersProceeds fromissuance ofClass Aordinary sharespursuant to - 7,313 - - - 7,313 1,035 underwriters?exercise ofover-allotmentoptionProceeds fromissuance ofSeries Credeemable - - - - 47,436 - - convertiblepreferredsharesPayment ofissuance ofClass Aordinary sharespursuant to - (516 ) - - - (516 ) (73 )underwriters?exercise ofover-allotmentoption?sissuance costsPayment ofissuance costs - (9,119 ) (304 ) (43 ) - (9,423 ) (1,335 )for initialpublic offeringNet cash (usedin)/provided by - (2,322 ) 46,719 6,613 47,436 44,397 6,283 financingactivities

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

Three Months Ended Six Months Ended June 30, March 31, June 30, June 30, June 30, 2019 2020 2020 2019 2020 RMB RMB RMB US$ RMB RMB US$ (Unaudited) (Unaudited) (Unaudited) (Unaudited) (Unaudited) Effect ofexchangeratechanges on 1,018 3,185 (454 ) (64 ) 451 2,731 387 cash andcashequivalentsNetdecrease incash and (19,325 ) (76,647 ) (16,826 ) (2,382 ) (1,366 ) (93,473 ) (13,230 )cashequivalentsCash andcashequivalentsat the 79,478 321,662 245,015 34,680 61,519 321,662 45,528 beginningof theperiod/yearCash andcashequivalents 60,153 245,015 228,189 32,298 60,153 228,189 32,298 at the endof theperiod

Unpaid issuance cost for Series Credeemable convertible preferred 743 743 743 105 743 743 105shares included in Accrued expensesand other liabilitiesUnpaid issuance costs for initialpublic offering included in Accrued - 5,608 5,304 751 - 5,304 751expenses and other liabilitiesUnpaid issuance costs for issuance ofClass A ordinary shares pursuant tounderwriters? exercise of - 1,046 1,046 148 - 1,046 148over-allotment option included inAccrued expenses and otherliabilities