In the EHang Third Quarter 2023 Earnings Conference Call, CEO Huazhi Hu announced that their EHang 216-S unmanned aerial vehicle (UAV) has secured the world’s first type certificate from China’s Civil Aviation Administration (CAAC). This significant achievement, following over 1,500 compliance test flights and more than 40,000 safe flight records, paves the way for commercial operations. The company also reported growth in sales, with 13 units of the EHang 216 series delivered in Q3 2023 and a sales pipeline of over 245 units in China.
Key takeaways from the call include:
- The EHang 216-S UAV has received the world’s first type certificate from the CAAC, marking a significant milestone for EHang and the eVTOL industry.
- The company has completed a rigorous certification process, including over 1,500 compliance test flights and more than 40,000 safe flight records.
- EHang reported Q3 delivery of 13 units of its EHang 216 series, reflecting substantial growth year-over-year and quarter-over-quarter. The total sales pipeline exceeds 245 units in China.
- EHang is preparing for commercial operations, focusing on sightseeing and short-distance passenger flights. The first batch of EHang 216-S aircraft is expected to roll out in Q4 2023.
- Partnerships have been established with Shenzhen Boling and the Hefei Municipal Government for the purchase of EHang 216-S units.
- The company reported total Q3 revenue of RMB28.6 million, a 248% increase year-over-year, and expects further growth in the coming quarters.
EHang is also working on optimizing the power and battery systems of its EHang 216-S model and investing in solid-state lithium battery technology to improve flight performance. A long-range model, the VT-30, is under development for intercity air mobility, and plans are underway to obtain type certification for the EHang 216L model once a certification standard is established. EHang anticipates strong demand from domestic scenic spots in China in 2024, followed by global demand in 2025 after obtaining foreign government approvals. The logistic and firefighter versions of the EHang 216 are also expected to contribute to revenue growth. The company anticipates a slight increase in the average selling price of the EHang 216 after obtaining type certification.
InvestingPro Insights
As EHang makes headway with its EHang 216-S UAV and prepares for commercial operations, recent data from InvestingPro provides additional context for investors considering the company’s financial health and market position. With a market capitalization of $895.21 million and a notable gross profit margin of 64.16% over the last twelve months as of Q2 2023, EHang demonstrates a strong ability to generate earnings relative to its revenue.
InvestingPro Tips suggest that while analysts anticipate sales growth in the current year, EHang has been operating with a moderate level of debt and has not been profitable over the last twelve months. This is reflected in an adjusted P/E ratio of -18.49, indicating investor expectations of future earnings growth to justify the current share price. The company’s price/book ratio stands at an elevated 68.72, suggesting a high valuation compared to the company’s book equity.
These financial metrics are crucial for investors as they balance the company’s recent certification achievements and sales growth prospects against its current profitability challenges. For those looking to dive deeper, InvestingPro offers additional insights with a total of 15 InvestingPro Tips available for EHang, which could provide further guidance on investment decisions.
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Full transcript – Ehang Holdings Ltd . (NASDAQ:) Q3 2023:
Operator: Good day, ladies and gentlemen, and thank you for standing by, and welcome to the EHang Third Quarter 2023 Earnings Conference Call. As a reminder, we are recording today’s call. Now, I will turn the call over to Anne Ji, EHang’s Senior Director of Investor Relations. Ms. Anne, please proceed.
Anne Ji: Hello, everyone. Thank you for joining us on today’s conference call to discuss the company’s financial results for the third quarter of 2023. The earnings release is available on the company’s IR website. Please note that conference call is being recorded and audio replay will be posted on the company’s IR website. On the call today, we have Mr. Huazhi Hu, our Founder, Chairman and Chief Executive Officer; Mr. Xin Fang, Chief Operating Officer; and Mr. Conor 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 translation is for convenience purpose only. In case of any discrepancy, the management’s statement in the 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 these 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 applicable law. Also, please note that all numbers presented are in RMB and are for the third quarter of 2023, unless stated otherwise. With that, let me now turn the call over to our CEO, Mr. Huazhi Hu. Please go ahead, Mr. Hu.
Huazhi Hu: [Foreign Language] [Interpreted] This is the English translation of Mr. Hu’s remarks. Hello, everyone. Thank you all for joining our conference call today. The third quarter of 2023 marks a significant milestone in our journey as we have successfully reached one of the most highly anticipated and thrilling achievements. Our self-developed EHang 216-S passenger-carrying unmanned aerial vehicle system has obtained the type certificate from the CAAC on October 13 this year, making it the world’s first TC for an unmanned eVTOL aircraft. It is not only a milestone for EHang, but also serves as a guiding light for the entire eVTOL industry, paving the way for its future development. As the saying goes, being the pioneer in the new industry is no easy feat. It requires innovation from the ground up and unwavering determination from the outset. At EHang, we have always been committed to this principle to keep in mind our humble beginnings and never give up. In early days, when there were no established method for eVTOL airworthiness certification worldwide, we embarked on a journey of continuous exploration, experiment and improvement. It was in January 2021 that the CAAC officially accepted our TC application for the EHang 216-S. After that, over more than 1,000 days and nights, we persevered with relentless effort, overcoming challenges and demonstrating innovation. We also faced additional hurdles posed by the epidemic. Today, we have successfully completed the entire process of TC certification, starting from scratch, leading the way for unmanned eVTOL type certification. The EHang 216-S stands out as a disruptive and innovative product, boasting a range of unique features such as its all-electric nature, autonomous flying, fully back-up systems and cluster management, among others. As a result, it differs significantly from traditional piloted aircraft in terms of technical architecture, configuration, performance, functionality, operation modes, and flight environment. Recognizing this, the CAAC gathers a team of nearly 100 top experts from across the nation to review and certify EHang 216-S. Through close collaboration between the EHang team and the CAAC review team, a rigorous and innovative approach was taken and established the world’s first airworthiness certification standard for passenger-carrying UAVs. Guided by the principles of Life First — Safety First, this standard ensures that EHang 216-S certifies at the level of safety equivalent to that of a piloted aircraft. These standards lay a solid foundation for the verification of EHang 216-S, contributing Chinese wisdom and solutions to the global development of the electric passenger-carrying UAVs in civil aviation and the establishment of the comprehensive airworthiness certification standards. The process of airworthiness certification is a rigorous one with no shortcuts. Grounded in the principles of science, comprehensiveness and safety, and following the framework of CCAR-21, we, in collaboration with the CAAC, have undertaken an extensive and a complex review and verification process. This comprehensive approach encompasses multiple dimensions and disciplines, ensuring a meticulous and systematic evaluation. Across the 12 professional subjects and 65 major categories, we have completed over 450 compliance test items. The 12 professional subjects cover a wide range of areas, including flight performance, structure, design and configuration, electrical system, propulsion unit, flight control system, ground control station, communication and data link, airborne human-computer interaction, general aspect, continued airworthiness, and system safety. The compliance tests involving assessing main material performance, structural strength, flame resistance, crashworthiness, gas toxicity, environmental conditions of equipment and systems, software simulation, data links, ground control station, overall system functionality, electromagnetic compatibility, flight performance and flight stability characteristics, et cetera. Throughout the validation process, we meticulously scrutinized every component, equipment, and the entire aircraft for any potential defects, faults or interference. This scrutiny extended to both laboratory tests and the flight tests. Over 1,500 compliance test flights along with more than 40,000 safe flight records, EHang 216-S has finally met all the requirement to complete a compliance review. The TC process has been conducted with a scientific rigor and authoritative oversight. The TC signifies that EHang 216-S is qualified for passenger-carrying commercial operations. It also marks the beginning of the new chapter as we are poised to take the leading commercial operations in the days to come. I want to thank the entire team at EHang as well as all the leaders and members of the CAAC and the review team for their support and dedicated efforts, and to all the people who support and are passionate about our development as well as the eVTOL industry. However, we are fully aware that obtaining TC does not mean we have succeeded. Instead, it just makes the beginning of a new chapter for us. The TC has opened the door to rapid advancement in unmanned aviation industry and vast opportunities presented by the low altitude economy. It will propel China’s urban air mobility industry into the faster lane. As a pioneer in this field, we anticipate several firsts that await us to achieve on this journey. This include milestones such as the first EHang 216-S aircraft produced according to the TC officially rolling off the production line and a first batch of EHang 216-S operation sites and routes, the first commercial flight and the first passenger to buy a flight ticket. We invite you to stay tuned and witness these milestones as we progress forward. Undoubtedly, prioritizing flight safety is of a paramount importance in aviation industry as it directly impacts the personal safety of every passenger. Throughout the past few years, we have conducted over 42,000 autonomous flights across 14 countries, establishing an outstanding track record. As we enter a new phase of commercial operations, we will continue to uphold our commitment to safe flights for healthy and sustainable development of this industry. At the production level, we maintain strict control over the quality standards of our aircraft. Based on obtaining AS9100D, International Aerospace and Aviation Quality Management System certification, we are now actively cooperating with the CAAC to finalize the processing of our production certificate. This ensures that every aircraft producing mass quantities adheres to the airworthiness standards and will be issued an airworthiness certificate and efficiently delivered to our customers. Regarding operations, we are advancing towards commercial operations of EHang 216-S in an orderly manner. We are undertaking comprehensive preparations such as enhancing safety operational regulations, conducting personnel training, constructing [verti-ports] (ph), establishing maintenance and service systems, and obtaining operational licenses and insurance. Furthermore, in August of this year, our Unmanned Aircraft Cloud System received the approval for trial operations from the CAAC, which serves a significant foundation for our upcoming commercial operations. It also plays a vital role in ensuring the safety and management of large-scale operations of our unmanned eVTOL aircraft. At the commercial operations stage, we will take a proper pace and approach of our development with a responsible mindset by prioritizing the public safety and fostering industry development. Initially, we have set restrictions on the usage and operational conditions of EHang 216-S, primarily focusing on sightseeing and short-distance passenger flights. Adhering to the principle of progressive risks and a conducted trial operation while advancing certification, we plan to gradually lift the restrictions, expanding operations narrows into a broader range of urban and mobility applications, including airport shuttles and fully autonomous urban air taxis, et cetera. Throughout this process, EHang remains dedicated to enhancing our product, advancing fundamental research and development and achieving milestones such as the test flights with high energy density batteries and test flight our lift-and-cruise eVTOLs such as the VT-30, alongside its airworthiness certification. These efforts will be geared towards achieving significant advancement in our flight performance. To achieve safe, autonomous and ecofriendly e-mobility, it’s not only a long-standing commitment for EHang, but also a shared goal for humankind. Facing a long journey ahead, we are aware of the significant responsibilities and the mission as a pioneer of innovations. Our dedication remains unwavering, guided by the core principles of the Chinese civil aviation industry, a reverence for life, regulations and duties. We are resolute in our pursuit of strategic goals, unwaveringly contributing towards a high-quality development of the civil unmanned aviation industry, thereby making meaningful progress in advancing this innovative sector. Now, I will hand over the call to our Chief Operating Officer, Mr. Xin Fang. Thank you.
Xin Fang: [Foreign Language] [Interpreted] This is the English translation of Mr. Fang’s remarks. Thank you, Mr. Hu, and hello, everyone. The achievement of the EHang 216-S TC in October this year makes EHang’s transition from the product certification phase to the next stage of commercial operations. Aligned with our strategic positioning as an urban air mobility platform operator, the company is set to implement an integrated business model, driven by both product sales and operational services. Therefore, production, sales and operations are the three key drivers to our business growth. I will now share the latest updates and plans of our company in these three areas. Regarding sales, we successfully delivered 13 units of EHang 216 series products in the third quarter, marking a notable year-over-year and quarter-over-quarter growth. With the EHang 216-S receiving its TC, we’re seeing a significant increase in business collaborations and product purchase demand from customers around the globe, especially from China. For instance, Shenzhen Boling intends to purchase 100 units of EHang 216-S, and we have delivered an initial five units for operational preparations. Moreover, in accordance with our strategic partnership with the Hefei Municipal Government is set to facilitate orders for at least 100 units of EHang 216 series products. As of now, the total sales pipeline for the EHang 216 series in China have more than 245 units, which will be delivered in phases as per customers’ requirements. Regarding production, guided by the CAAC Central and Southern Regional Administration, we are steadily moving towards producing EHang 216-S according to its TC at our Yunfu factory. The initial batch of EHang 216-S produced based on its TC is scheduled to roll out our production line for deliveries to our customers in the fourth quarter of 2023. In terms of operations, the growth and the sustained development of the UAM ecosystem and emerging industries hinge on strategic government planning and policies. We are glad to see that just before the EHang 216-S obtains TC, China issued a green aviation manufacturing industry development outline 2023 to 2035 jointly by the Ministry of Industry and Information Technology, the Ministry of Science and Technology, the Ministry of Finance and CAAC to encourage eVTOL operations by 2025. Moreover, recently, many local governments in China have introduced a series of supportive policies to cultivate robust and sustainable growth in the low-altitude economy, establishing a stable policy foundation for our UAV operations in China. Since the third quarter, we have entered the strategic partnerships with Bao’an District Government of Shenzhen and the Hefei Municipal Government. These governmental collaborations involve providing support in terms of policies, infrastructures, applications and subsidized to EHang, aimed at facilitating industrial growth and applications within these regions. Serving as Shenzhen’s gateway and a key transit hub in the Greater Bay Area, Bao’an District aims to become a pioneering zone for low-altitude economy innovation and development in China, and its plans to build over 100 low-altitude aircraft and verti-ports along with the launch of a more than 50 UAV routes by 2025. Currently, in strategic partnership with the EHang, Bao’an actively expediting its establishment of a UAM Operation Demonstration Center at the OH Bay with the plan to initiate aerial tourism and the local sightseeing services with EHang 216-S. Hefei City, serving as a central area for low-altitude airspace managements reform in Anhui Province, and as the regional general aviation service hub, is actively fostering the development of a low-altitude industry cluster. The Hefei Municipal Government intends to provide EHang with a total value of US$100 million support, including facilitating purchase orders and financing support. Additionally, Hefei is dedicated to promoting the utilization of our UAVs across various low-altitude scenarios, including culture and tourism, emergency transportation, air logistics and firefighting, et cetera. Meanwhile, we will plan to launch regular operations with our AVVs in Luogang Central Park in Hefei. Internationally, following by obtaining a TC from the CAAC, we are proactively engaging in efforts to secure a bilateral recognition and certification from various civil aviation authorities through communication and collaborations with our local customers and partners. This will position us well for the next phase of delivering international orders and expanding our business abroad. Next, I will turn the call over to our CFO, Conor. Thanks.
Conor Yang: Thank you, Mr. Fang. Hello, everyone. This is Conor. Before I go into details, please note that all numbers presented are in RMB and are for the third quarter of 2023, unless stated otherwise. Detailed analyses are contained in our earnings press release, which is available on our IR website. I will now highlight about some of the key points here. In third quarter, total revenue was RMB28.6 million, an increase of 248% from RMB8.2 million in the same period last year, and 186% increase compared to RMB10 million in second quarter. The increase was primarily attributed to the increase in our sales volume of EH216 series products. We delivered 13 units of EH216, up 225% year-over-year and 160% quarter-over-quarter. We’ve been seeing growing demand for our products upon obtaining the TC, and expect our revenue further increase and cash flow generation continue to strengthen in the next few quarters. Gross margin continued to stand at a high level of 64.6% in third quarter, an increase of 4.4 percentage points from 60.2% in second quarter, primarily driven by higher average selling price of our EH216. Furthermore, our distinctive advantage in the UAM industry allow us to enjoy higher margin over other type of electric transportation vehicles. In third quarter, our adjusted operating expenses, which are operating expenses excluding share-based compensation expenses, were RMB54 million, down 9.5% from RMB59.7 million in the same period last year and down 7% from RMB58.1 million in the second quarter. These decreases were primarily due to a reduction in professional service fees and a healthier situation in accounts receivable compared to last year, demonstrating effective cost control and improved operational efficiency. As a result, our adjusted operating loss in third quarter was RMB34.2 million, an improvement from a loss of RMB52.9 million in the same period last year and a loss of RMB51.3 million in the second quarter. Adjusted net loss was RMB31.3 million, a significant reduction of 43.1% year-over-year and a reduction of 39.5% quarter-over-quarter. Turning to our balance sheet. Our stringent approach to cash and liquidity management is reflected in our cash position. As of the end of third quarter, we have RMB295.6 million of cash, cash equivalent, short-term investment and restricted short-term deposits. In July, we successfully concluded a private placement, securing US$23 million from long-term strategy investors. The funding will bolster our liquidity and provide support for technology advancement, business development and post-certification commercial operations. We are confident in our cash position will be sufficient to meet cash needs for us to reach cash flow positive status in the near future. Starting from this quarter, we will provide revenue guidance for the next quarter in our earning results. We are optimistic about our post-TC commercial operations. We anticipate achieving revenue of about RMB56 million for the fourth quarter, representing an increase of 257% year-over-year and an increase of 96% quarter-over-quarter. For the fiscal year of 2023, we expect total revenues to be about RMB118 million, up 166% from last year. Looking forward, as we sell and deliver more products per customer’s request and steadily expand our commercial operations in the future, our cash flow will improve and we are confident that the company can generate positive cash flow in the later part of 2024. That concludes our prepared remarks. Let’s now open the call for questions. Operator, please go ahead.
Operator: Thank you. [Operator Instructions] The first questions come from the line of Tim Hsiao from Morgan Stanley (NYSE:). Please ask your question. Your line is open.
Unidentified Analyst: Thank you for taking my question, and congratulations on receiving the type certificate from CAAC. I am Tim’s colleague and will ask the question on behalf of him as he lost his voice due to a bad cold. Just a quick question about order backlog. Can we get a sense of the composition of current order backlog in terms of geographic mix and model mix? When…
Conor Yang: Yes, thank you.
Unidentified Analyst: [indiscernible] EHang’s revenue since company has obtained the type certificate?
Conor Yang: Hi. Thank you for the question. Currently, our sales pipeline reached more than 450 units of unmanned eVTOL aircraft from China and other parts of Asia. This includes more than 245 units from domestic customers and 210 units of pre-orders from Asian overseas markets. There are also other countries — from other countries that will be delivered after obtaining validation TC in these respective countries. And over 90% of our sales pipeline in the domestic and Asian markets are for EH216-S, and less than 10% orders from EH216 logistic version and also EH216 firefighter version. These sales pipeline will be delivered in stages per our customers’ request. For instance, our [indiscernible] customers, they typically start with an initial purchase of three to 10 units for training and trial operations and local sites. Subsequently, as operation expands and demand increase, they will buy more products. So, these are precious timeline typically spans one to three years. So, we can see a significant increase in delivery volume in the fourth quarter upon obtaining the TC. Moving forward, we will provide revenue guidance for the next quarter in our quarterly financial reports. Thank you.
Unidentified Analyst: Thank you.
Operator: Thank you. We are now going to proceed with our next question. And the questions come from the line of Ting Song from Goldman Sachs (NYSE:). Please ask your question. Your line is open.
Ting Song: Thank you for taking my questions. Just a quick one. What’s EHang’s progress on getting TC certification in overseas market like Middle East or some other countries? Thank you.
Huazhi Hu: [Foreign Language] My English is poor. I need translated by Anne. [Foreign Language] [Interpreted] Okay. The type certificate we have obtained is by CAAC. As we all know that in the past few years, the CAAC has reached a lot of bilateral recognition agreement with other aviation authorities in other countries. Now, we are promoting the communication between CAAC and with other civil aviation authorities. For example, recently, the Brazil Civil Aviation Authority had came to China. So first, we will prioritize the — to work on the regions that we have orders in the local market. We believe we will make efforts to promote the VTC procedure, which means the verification of the type certificates in the local [counties] (ph) and we will provide support to that work. Before we obtain the VTC, we can deliver some products to the local market and do some training for the local clients. We will extend our market expansions at a proper pace to the international market. We believe that soon we will see our global exposures. So, the VTC is administrative work, so it’s not as complicated as the type certificate. Yeah. That’s my answer. Thank you.
Operator: Thank you. We are now going to proceed with our third question. The questions come from the line of [Rong Zhao from TS] (ph). Please ask your question. Your line is open.
Unidentified Analyst: Okay. Thank you for taking my questions. So, I have two questions on my side. And the first one is on EH216. So, I would like to ask whether the company sees the need to upgrade the product so as to increase the range of mileage judging from the current feedback from the demand side? And if so, what is the timeline and the cost outlook? And second question is about airworthiness certification in the EH216 logistic operation. What is the expected time to get TC? Thank you.
Huazhi Hu: [Foreign Language] [Interpreted] Thanks for your questions. The EHang 216-S is designed for the short-distance air transportation within the city. So, according to our test, our product is capable to do the air taxi services within the city. In order to achieve the longer lifetime, we will continue to optimize our power system and the battery system. As you know that there are many companies in China have invested in the solid-state lithium batteries, for example, CATL, and recently, we have also invested in a domestic solid-state lithium battery company. So, we are making efforts to achieve the goal that to tackle the flight performance in the future. Our goal is to achieve a longer range, but meanwhile, we will ensure safety. During we are doing type certification with EHang 216, the VT-30 development pace is much slower, but now we are — after the type certification of EHang 216, we are also developing and working on the long-range model, which is the VT-30, a lift-and-cruise model for the intercity longer-range air mobility. The EHang 216L have obtained the operations — trial operation certificate for the cargo transportation previously. So after there is a certification standard for this kind of aircraft, we will supply for type certification for the EHang 216L. Before we obtain the type certificate of the EHang 216L, we can still expand our business based on the trial operation permit that we have obtained. As the EHang 216L and S share the same flight platform, so we can leverage the experience from the type certification for the passenger model, so we can expect to take a shorter time on the EHang 216L type certification than that of the passenger one. Thank you.
Unidentified Analyst: Thank you.
Operator: Thank you. We are now going to proceed with our next question. And the questions come from the line of [Laura Li] (ph) from Deutsche Bank (ETR:). Please ask your question. Your line is open.
Unidentified Analyst: Hey, thank you for taking the questions, and congratulations on receiving the first type certificate. My first question is, we already talked about the backlog orders, but just clarification on this. Would you expect to be able to collect deposits? And also, when do you expect the first customer paying flight to occur? And my second question is, how should we think about the cash burn trajectory and your future financing plans? Thank you.
Conor Yang: Yeah, thank you for the question. For your first question, as mentioned before that we are — after securing the TC, we have seen a surge in interest and encourage from many domestic and global customers for our pre-order and order of intent. We charge a small non-refundable deposit which varies by customers to confirm their commitment to purchase. And for the purchase order, right now, we collect about 30% for down payment and then for the remaining 60% to 70% before delivery. So, for your second question on the cash burn situation and capital need, our current average monthly cash burn rate of our operation is less than RMB10 million or roughly less than about US$1.4 million. At the end of the third quarter, we have RMB295.6 million of cash, cash equivalent and short-term investments and restricted short-term deposit. Therefore, we believe that our current cash and cash equivalents of our anticipated cash flow from operations will be sufficient to meet our anticipated working capital requirement. Looking forward, as we sell and deliver more products per customers’ request and steadily expand our commercial operations in the future, our cash flow will improve, and we are confident that our company can generate positive cash flow in the later part of 2024. Thank you.
Unidentified Analyst: Okay. Thank you so much.
Operator: Thank you. We are now going to proceed with our next question. And the questions come from the line of Xuan Chen from Haitong Securities. Please ask your question. Your line is open.
Xuan Chen: [Foreign Language]
Conor Yang: Yeah. I’ll kind of briefly repeat your question that — your first question is the — how about the order for the next two years, and then, the validation of type certificate in overseas, how long will it take, and thirdly, regarding the ASP price of 216. As we see that our guidance for the fourth quarter basically, the 216 volume has increased quite a lot, and for the next three years actually, I will say that the first year of — next year of 2024, the majority of the order will come from domestic sightseeing places or scenic spots in China. We estimate that in China, there are over 6,000 scenic spots that can apply our products in their location to enhance their revenue. Even we use like 10% penetration rate in each site and use five units, that will be like over 3,000 216 demand from domestic scenic spot in the next several years. So 2024, we’ll see strong demand coming out from scenic spot in China. And the application for oversea validation of TC will be a lot shorter than the TC we have obtained from CAAC. We are expecting that roughly about — should not be — maybe 12 months more or less for the local — for the foreign government to get approval for validation TC. So, even though we have seen a strong demand from globally right now, but we expecting give a year of getting validation TC from different countries globally. We’re expecting that global demand will come in a great way in 2025. So, in 2025, the growth driver will be the domestic scenic spot demand as well as the international order in 2025. And then, coming to the later part of 2025, for transportation purpose demand of our 216 will start to contribute a meaningful portion of our business after one to two years build out for the infrastructure and in cooperation with local government in China. So, in 2026, there’ll be three ways of revenue contribution orders. So, first one is again the domestic scenic spot; and secondly, global order; and thirdly, for transportation purpose of 216. So, all of these will be — will contribute a lot of our revenue in the next three years. And other than that, our logistic version of 216 as well as the firefighter version of 216 will also provide a strong growth driver for our revenues going forward. And regarding to ASP of 216, yes, we saw that there’s a slight increase on ASP third quarter versus second quarter. And especially after we obtain TC, we will have a stronger position in our pricing. So, 216 — sorry, RMB2.16 million per selling price, that’s a listed selling price and we sometimes give certain discount to our customers. But after we obtain TC, we think the pricing will be stronger so we should expect a slightly increase on the ASP. And especially if those orders coming from overseas, we can even show a lot higher price. Yeah. So, we’re actually looking forward that there’s also upside on the ASP price for 216. Thank you.
Xuan Chen: Okay. Thank you for your color.
Operator: Thank you. Seeing no more questions in the queue, let me turn back the call to Ms. Anne for closing remarks.
Anne Ji: Thank you, operator, and thank you all for participating on today’s call. If you have any further questions, please contact our IR firm by email or participating our following investor events through the calendar information provided on our IR website. We appreciate your interest and look forward to our next earnings call. Thank you.
Operator: Thank you all again. This concludes the call. You may now disconnect your lines. Thank you.
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