Why EHang Holdings Stock Crushed the Market Today

EHang Holdings (EH 16.44%) was flying high as the trading week came to a close. On Thursday, American Depositary Receipts (ADRs) exploded in the stock market, rising to record a price gain of more than 16% on the day. It was no surprise as the Chinese air vehicle company posted a surprise net income figure in its last reported quarter. By contrast, the S&P 500 the index was founded, registering a decrease of 0.8%.

Growth higher in second quarter

EHang reported a serious and sharp increase in second-quarter revenue, which jumped an unbelievable 920% year-on-year to more than 102 million yuan ($14 million). In addition, the company moved to a non-GAAP (adjusted) net profit for the period; this was 1.2 million yuan ($168,330) or 0.02 yuan ($0.01 per share). The net loss in Q2 2023 was sizable at nearly 52 million yuan ($7.3 million).

With this performance, EHang nearly obliterated analysts’ estimates. Forecasters tracking the stock expected just 92 million yuan ($12.9 million) on the top line and were modeling an adjusted loss of 0.84 yuan ($0.12).

Much of this performance was due to high volume, with many Chinese customers taking sizeable orders from the company. In addition, the award of three production certificates from the country’s aviation industry regulator led to what he described as “a substantial increase in demand and orders”.

Triple-digit growth will continue, the guide suggests

With these tailwinds, EHang expects continued triple-digit growth. It gave current (third) quarter revenue guidance of about 123 million yuan ($17.3 million); if achieved, this would represent an improvement of approximately 330% over last year’s number.