FB Pixel no scriptChinese passenger drone maker EHang files for US IPO on Nasdaq | KrASIA

Chinese passenger drone maker EHang files for US IPO on Nasdaq

Written by Song Jingli Published on   2 mins read

The global commercial UAV market is expected to grow to USD 103.7 billion in 2023.

Guangzhou-based EHang, one of the largest drone makers in China and also the first company worldwide to have unveiled a completely autonomous passenger drone, filed Thursday with the US Securities and Exchange Commission to go public on the Nasdaq.

The company said the proposed maximum aggregate offering price would be USD 100 million, adding that this is estimated solely for the purpose of determining the registration fee amount. The final pricing and the number of shares to be offered have not been determined.

EHang, which was founded in 2014, said part of the new funds will be used for research and development of products, services, and technologies, as well as for selling and marketing, including the development of sales channels globally.

EHang said in the prospectus that it had delivered 38 passenger-grade drones for testing, training and demonstration purposes, and had developed two command-and-control centers for smart city management. The company added that it still has 28 unfilled purchase orders for passenger-grade drones.

The firm made RMB 66.5 million (USD 9.7 million) in revenue in 2018, only 4.7% of which was from urban air mobility, including passenger transportation and logistics. Smart city management, including the deployment of drones to perform various tasks such as fire control, environmental monitoring and traffic management, contributed 45.8% of the 2018 revenue.

Aerial media, which refers to the deployment of a large fleet of light-emitting drones to create light shows in the sky for advertising and entertainment purposes, generated 47% of the 2018 revenue. The company booked RMB 80.5 million (USD 11.7 million) in net losses last year.

The company also confirmed in the prospectus that it started to phase out the consumer drone division in late 2016, since its business was not successful under huge competition.

In August EHang signed a strategic cooperation agreement with the municipal government of Guangzhou, the capital of South China’s Guangdong province, to enable drones to carry passengers and cargo in 11 districts on a trial basis in the city. This made Guangzhou one of the pioneers worldwide to clear infrastructure and regulatory barriers for the urban air mobility industry.

According to the consulting company Roland Berger, several passenger-carrying drone projects are scheduled to take-off in cities like Dubai, Singapore, Los Angles, and Dallas from the early 2020s.

According to Frost & Sullivan, the global commercial unmanned aerial vehicle (UAV) market was USD 3.7 billion in 2018 and is expected to grow to USD 103.7 billion in 2023, representing a compound annual growth rate of 95%, said EHang in the prospectus.

“In particular, we expect the relative revenue contribution from air mobility solutions to increase and that from aerial media solutions to decrease in the foreseeable future,” said EHang in the prospectus.


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