EH - EHang: Investors Underestimate How Much The Chinese Government Wants This

2024-06-19 11:13:33 ET

Summary

• EHang Holdings is now in execution mode, collecting large orders, expanding production, and ramping revenues.
• The Chinese government wants to push the eVTOL sector to take a leading role, bringing about strategic initiatives, strong subsidies, and introducing first infrastructure projects.
• Regional actors in China are already supporting EHang with activities such as building vertiports and placing large orders, indicating a promising future.
• Even though the share price is still widely unresponsive to the progress, the company holds great potential and I reiterate my Strong Buy.

This is my second piece on EHang Holdings ( EH ) and this time, I would like to focus on the influence of government support for the company in China - and, naturally, give a quick update on the latest developments. Since my last analysis , EHang's share price has moved quite a bit down and up and is now below the previous level. Fundamentally however, the company made substantial progress, including achieving further regulatory certificates, ramping revenues, and signing customers. Following, I elaborate on this progress and dive into why I believe EHang will experience a meaningful push in product sales. Therefore, I keep my STRONG BUY rating in place....

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