EHANG Stock: BETTER BUY THAN NIO? | Full Details
some of you are upset with me because i'm recommending stocks other than baba i appreciate that sentiment in your loyalty the baba stock guys the good news is i have not sold my baba stock i am holding on to it as i keep saying i'm bullish long term on barber but a lot of you have asked for other alternatives and i am also very interested in other chinese stocks so let's look at another alternative there are stocks that have a lot less overhang from regulatory issues and here is another one this is my number two tip so really it is well before we get to that guys as always remember this is not financial advice this is for entertainment only otherwise just say that and do subscribe to our channel we are increasing by we are doubling our subscription every nine days our community is massively expanding uh which is really wonderful and i really appreciate that guys i appreciate your support and your likes and your comments now we're going to look at seven quick things here first of all what are these drones that e h is selling because that's what we're talking about we're talking about e-hang secondly we're talking looking at who they make them with thirdly a very brief overview of the product we're not gonna go into the text much i think we're gonna look at numbers and earnings which brings me to my number four we're gonna look at the earnings and then number five we're going to look at a quick very quick div dive into what is a regulatory framework around the world and especially here in china because there is some big big big news for drones and then number six i'm gonna tell you very briefly uh but three trial piled pilot programs that are in operation are present in china and then lastly is it a good time to buy what's my price target have i bought already or am i about to i will get through all of that and we'll do it really as quickly as you possibly can with as much information density as people can absorb so let's get straight into it i'm going to show you some sources because i think it's always clear for everybody if you know what it is that i'm looking at what you're looking at so let's have a quick look here basically they are making drones they're making taxis drones delivery drones and survey drones and who are they doing it with well they have a joint venture since 2018 with an austrian company and this austrian company is probably one most people haven't heard of it is called facc now they are one of the leading makers of sort of light and well-shaped bits of aeroplanes and i am no aero uh aerospace engineers you can tell from that description but who they're doing it for well have a quick look at this guys as you a bit in here can you see and you recommend recognize some of these companies airbus boeing bombardier so basically every single plane in the air gulf stream helicopters etc every single plane that is in the sky that you see and they're not many nowadays but usually the alerts they're saying an aircraft with facc technology on board takes off every second so they develop and manufacture lightweight systems for the aerospace industry and they collaborate with every single aircraft manufacturer in the world so ehang has a very good good partnership here i think that is a solid joint venture that they have there now ehan manufacture their own craft their own drones if you want to call them like unmanned aerial drones or unmanned aircraft but they do take components just like airbus does or boeing does from uh the facc this austrian giant that company is listed in austria if you want to look at that and they have a market cap of something like 750 million um euros i think it is if i'm not mistaken on that i don't correct you might want to correct me on that let's have a quick look here what is it they employ 3 400 people actually they have 750 million euros in revenue so it is a pretty sizable company that most people have never heard of now let's have a quick look at what are the actual products that they're making well they have essentially a number of drones so here these are logistic drones and they basically just vary in size and how much they can carry how far they can go this ehang 216 here is the biggest one it can carry 200 200 kg and i'm going to tell you why that's important and then they've got some smaller ones which can carry 5 kg or even just 0.45 kg which are both designed for deliveries there's also a a a a manned drone helicopter i'm going to find a picture for you guys in a second don't worry uh where basically two people can sit in it and that is also being tested and it's an operation now they have some interesting uh partnerships one with young hue group which is a grocery so the supermarket company and they are delivering fresh food within a um five kilometer perimeter from that depot uh that's in in in in the works that's a pilot program and then with dhl they also have a pilot program in donghuan and guangdong province which is the province here bordering china bordering hong kong um and they are delivering dhl packages which is very interesting so again a very very big international powerful brand hook up there i mean it doesn't get much bigger than the dhl brand in logistics however rather than looking at how pretty these drones look let's look at the numbers because we are investors and that also tells us a little bit more about the products so this is the last earnings highlight the next one is coming out very shortly so i'll be covering that for sure and i'll be covering that call as well with you guys you can see here in the picture this is the um taxi sort of uh type drone the eh-216 passenger great one they have two of these um there is this one down here which i think is a firefighting one if not if i'm not mistaken and then uh they are sold here they sold 21 units in q3 of 2020 of the passenger one two people considering that as a sort of taxi uh what are they really being used to at the moment taxis not quite yet because regulation hasn't quite caught up yet but they are using them for some tourism and i'm gonna get into that in just a second and then they're also working on uh firefighting solutions and that's an interesting business because really okay i know some uh helicopter pilots here in hong kong and what are all the hong kong helicopters used for well ninety percent of basically their usage time is to fly along power lines and survey them sounds like a strange thing but you know we have a lot of storms on that kind of thing sort of forest and countryside here and that is a thing around the world that helicopters are used to fly along power lines which of course is incredibly expensive drones can do that much much cheaper there's a survey function there and then any kind of construction surveying from a government or engineering point of view that's a big big issue delivery of course is one for that sort of last mile or for things that have to be very urgent uh we saw there was a pilot in the u.s by by eh to deliver um organs that have been donated uh to the uh recipient that obviously has to happen very very quickly and you know you can use a very small drone for that very very quickly and then taxis is a little bit the future at the moment that is more of a um sort of tourist application really but let's look at this very quickly here so the intelligent aerial firefighting solution so they've taken the passenger drone and that can carry 200 kg so that can carry a lot of water or some sort of water type suppressant foam 150 liters of that and they've got six extinguishers put onto that why is that important well china is a very high rise country it is basically like manhattan but you know much bigger uh there are in 2019 we had almost 7 000 high-rise fires in china an increase of 10 percent and it is of course difficult to get to high floors for the firefighters and it also takes time to get there because of the intense congestion um ladders can generally go only 120 meters high up which isn't terribly high if you look at buildings and this drone can go 600 meters high up and it can respond instantly very very very quickly and there's a sort of platform commander control center with a cluster management and it is so it's operated remotely can carry 150 liters of foam which i'm told is actually quite a lot it is a lot more powerful to use so these sort of chemical foams to fight fire then rather than water there are in china 347 000 high-rise buildings over 24 meters and then perhaps even more importantly 6 000 buildings over 100 meters so we basically have 6 000 proper skyscrapers um and there are seven thousand urban fire stations uh uh and almost ten thousand suburban so possibly you could argue that a good proportion of these urban fire stations could be equipped with one of these just like they have trucks and and other equipment so there is a decent market there for those and of course also a decent maintenance contract which comes with that then we are looking at a the the same drone technology as eh2160 but as a heavy lifter so guys we're going to run through this fairly briefly and we're going to get on to the numbers so just bear with me for it for a minute here because it's good i think to just see a little bit what the product is what it can do where we are with the tech at this point so again that can carry 200 kg it's uh you know relatively clean energy because it's electricity you can use it for what large parcels aquaculture offshore oil rigs again a very very large user of helicopters offshore oil rigs and helicopters incredibly expensive to run aerial emergencies a disaster relief so again a a government potential there as well as just moving fairly heavy stuff just not too heavy but fairly heavy and they believe the global logistic market uh could be 446 billion by 2023 and china is predicted to be the largest regional market in the world accounting for 45 of the global logistics uh uh unmanned aerial market here you see um their production facilities so for those of you who like companies to manufacture things you know we're beating near without stick quite often here on this channel i am not but a lot of commentators are they do make everything themselves uh they're expanding uh the the guangzhou facility they have an r d facility training center etc there and um this expired facility they're going to start producing there within the first half of this year and they'll have an initial annual capacity of 600 units of passenger grade aavs these are these large drones we've just been seeing government very supportive on this one again the chinese government likes not just evs but they like drones they want to be the world leader on this uh and here they get six million us dollars from the local government in support which is very nice of them and they get preferential policies and treatments by the local government who have also helped them to get these trials off off the ground which we're going to talk about in just a minute now they got their first permit for flight operations of passenger ovs in north america and canada it is a special flight operations certificate and that allows them to do trial flights of this ea 216 um over quebec province canada and um there are some showcases on that my feeling is that generally speaking of these trials are being done over fairly um uninhabited areas and canada has quite a lot of those so it's a good place to do that and then there is a joint international project or development air ambulance they're working on that and they're basically been selected as the manufacturer for that by this ambula project which is supported by the international civilian aviation organization and um they basically want to create a rapid response essentially helicopter if you will so you know one person i guess a a paramedic could be in it and then you can pick somebody up very very quickly and they will basically survive the hardware and the r d of the power component and again it would make helicopters much much cheaper because you have no idea how expensive it is to fly in helicopters if you don't do so uh try booking a flight for half an hour um we were doing that actually we were gonna go to quote here for something like i think it's about eight and a half thousand us dollars for a 30 minute journey so fairly expensive stuff let's look at some numbers we're investors and numbers that's what we should be looking at what are their revenues these are remnant b figures you have to multiply it by 0.15 to get to us dollars so their revenue in q3 2019 was 34 million uh and then in q3 2020 it was basically double that up 104 just under 71 million not huge numbers right i mean look on that about 71 million in u.s dollars that is just 10 and a half million us dollars so you know relatively young company but this is a very very early stage industry still because we haven't got a proper regulation in place yet for this their gross profit is uh it went from 45 to just on a 60 margin which is which is fairly decent on the gross profit point of view remember this is gross not net uh and then the actual gross profit went up to 42 million so pretty pretty decent margin there i i would say um we are looking then here the operational expenditure is is negative i mean guys this is a young startup company they are spending money investing money they're not really making it the adjusted operating uh profit is actually there is a little bit of an operating profit figure here in q3 uh just 4.5 million rmb and their net income that this is it
adjusted uh 5.2 percent and interesting really i think more interesting rather than the the net income because i don't really care at this stage whether their company makes any money i wouldn't expect them to but look at the net margin it is gone from minus 29 to minus 1.5 percent and they if they adjusted up to 7.4 so that's a very very positive movement from one year to the next that they are sort of getting to that near a break-even point and let's look at a couple of items here on the balance sheet uh i love balance sheets that tell you a great deal one interesting item i think uh i i saw it immediately was that cash and cash equivalents last year were 321 million they said 157 million so they are burning through their cash pile fairly rapidly and they will need to raise some funds somewhere somehow they are listed obviously on the nasdaq but they are going to have to do some sort of capital race in my view they do have fairly substantial accounts receivable here of 137 million that's going up almost 100 million so that makes it look a little bit better they're actually selling things they just haven't got paid for them yet also the inventory is up 30 000 30 million rather and um so you know overall current assets are actually up slightly but uh in in my view there there is quite a bit of um quite a bit of cash burn there they call it short-term investment but what does that really mean i mean that's a good question really um in terms of assets non-current assets there's a bit of property equipment there at 12 million rmb uh and um some long-term loans receivable 14 million um short-term bank loans they've gone up there from five to fifteen that's sort of a more sort of a rolling credit facility day-to-day uh and then the accounts payable also gone up uh to have doubled you would probably expect that given the the growth of that business so yeah i mean obviously these are not massive numbers and they're not really telling us much of a story here let's have a bit more of a look at a consolidated statement up to essentially this last column here is um let me see if i can highlight that for you guys this last column here is basically um 20 20 uh cues one two three and um what are we seeing here well revenue is 125 million the cost of revenue 51 million is is much better than previously so we do see an improvement there on margin we have a gross profit which is up quite nicely almost doubled to operating expenses while you would expect that to increase so the operating loss is slightly smaller than the previous year which is quite a good indication given that revenues have doubled so they are they have fairly sound financial management here i i would think because a lot of these very early companies they're just burning cash as quickly as they can they don't seem to be do that they'll be doing that and obviously we have losses um that is probably a lot less interesting um so let's move on a little bit uh what what is the excitement about it well they're saying the world's first and only public to trade a mobility company so it attracts a lot of money people are making the parallel to tesla there really was no way you could invest in evs outside of tesla for a very very long time and eh are kind of in that position they're seeing that advantage which also gives them access to being able to raise capital and invest more and grow faster there is i think a very positive long-term market here but we need to get to to regulations and we're going to get to that in just a minute there are industry disruptive regulatory breakthroughs yes there is some positive some of their compelling high growth margin business ecosystem enabler global partnership network so they could also become in r d and sort of part supplier for other brands and they have a good management role okay fine so thank you well thank you very much let's have a little bit of a look here this is a very interesting story and that takes us to item number five guys so we are almost at a wrap here this the china's first national standard for express delivery service by unmanned aerial aircraft comes into place effectively from first of january 2021 that's a big step forward for actual drone delivery on a mass scale let's have a quick look at that who was that developed with well actually they talked to three players they talked to ehang jd and zto express which is the logistics company here so there are other avenues of investing into um drones i'm just going to call them drones because calling them unmanned aerial or whatever aircraft it's just too long uh but ehang is the most sort of clear one jd of course has lots of e-commerce stuff attached to it and zto express is also a logistic company so it's a relatively small part of that business um so they basically been talking to the government so they are very close to the government the government listens to them and this is a standard for basically last mile delivery service and it gives us safety standards and that's really what we need what does it say well what is permitted a maximum empty aircraft weight of 160 kg a maximum takeoff weight of 150 kg so that means 34 kg is all you are allowed to carry at this point whereas e-hangs can carry a lot more as we just seen at 200 kg and the airspeed can be no greater than 100 kilometers an hour well i don't think that's much of an issue uh in terms of speed and again gives you know um basically standards uh and it's essentially aimed at postal express companies to arrange delivery services and it then talks about ehang has that proprietary developed complete suite of intelligent aerial logistics solution including this eht-16 a heavy lift aav which can you know carry quite a lot so that's adding an advantage and that is why they're partnering with dhl and you can kind of see here how that looks like a dhl has basically built at least one of these sort of quite sizable boxes there is a chap at the bottom i'll show you it's another picture here you can see what that looks like it looks like a toy but it is a bit bigger than a toy and uh the delivery guys put the parcels in there and then there is an intelligent system that talks to the drone which tells it what parcel to pick up and where to bring it so i think it's a clever service it basically at the moment um covers eight kilometers distance from dhl service center in in dongguan and guangdong province here don juan is formerly a very industrial manufacturing place sort of the factory of the world it was called but it's changing very rapidly and it is obviously a logistics hub as well and what is it what's the advantage of it well it reduces one-way delivery time from 40 minutes to only eight minutes and can save costs of up to 80 per delivery with reduced energy consumption and carbon footprint compared to road transportation so you don't need to have a van you don't need to be stuck in traffic you don't need to employ somebody to actually get it out of the van and go and ring a bell and get it signed that takes a lot of time very very inefficient of how things are being delivered at present this can do it much much faster now if you live in apartment building for example there are challenges right like how do you get into it where does it get delivered all that stuff that needs to be addressed but certainly from a business point of view in this area in don juan i've been there many many times they are all fairly low rise factories are typically three four-story buildings and there is lots of space between the factory buildings big car parks and that kind of thing very very easy for a drone to land and drop something off and uh you know make some sort of sound and alert one of the security guys and again all of these factories typically have somebody sitting at the gate uh who lets you in and and checks people's credentials so very easy for them to actually do that in that kind of sector and i think this is where where the beginning of delivery will will will start um from it from a you know commercial point of view and at the moment that can carry up to 5kg of cargo per flight and they can tuck off and land the top intelligent cabinets that was particularly developed for the um the loading and offloading of the shipments um so quite an exciting business model i i think i think this is the future i mean i'd love to be able to fly out of my my living room window and and fly somewhere with it with an aerial taxi i think that is a little bit further down the road because that regulation isn't quite there yet yes we have pilots in austria in in norway uh in in canada there are pilots that iang are doing so they're already at the forefront of shaping that regulation as they are doing in china but i think really unmanned deliveries um and emergency response is i think where i see drones much more quickly i think if you look talk to fire brigades in places like like new york for example uh where you have very very tall buildings or any city with you know sort of skyscraper responds firefighters they'd be rather excited by that if they could have a couple of those and they could you know go going through a window very easily and and potentially actually also rescue people i mean that isn't quite there yet but you could you could see how that could be an option for fires and high-rise buildings and and there have been some some great tragedies with high-res buildings in the last couple of years around the world now let's have a look lastly at the actual chart let's have a look at some technicals and i'm going to tell you whether i think in my view this is a good time to get in on this if you are not already and i must admit a great failing on my part i had written down i looked it up today in my notebook at i think around 29th of december and do full eh research and buy question mark and then i got carried away with baba and all the madness that's been going on and i haven't and i'm kicking myself under the table uh quite hard why because at that point it's at 21 and i'll be at 48.76 uh overall you know it was listed at uh
eight just over 8.8 58.70 or so uh so very very very strong growth trajectory now where are we now is it good to get time to get in on this or is it just too expensive at present well let's have a quick look at some indicators here you obviously see a very very strong growth curve especially as of late people are getting very excited about this this flying tesla you know perhaps it'll fly higher than tesla and look at the rsi and i like to look at the rsi for fast moving stocks because it is just a very very quick indicator what's happening down here i'm going to highlight a few things here for you and are also magnified for those of you guys on small screens we saw a nice rally here from the 50 point line which i'll put in for you because it's important to look at the midpoint of rsi to get a clear trend basically when you're crossing from below all the way up like that you get a very clear buy signal if you are just bobbing about above or below the line like we did here or like we did here and again as i'll magnify that for you guys here so you know this is not really much of a signal if it's just bobbing about and if it crosses through it it very much is again here no much of a signal and now it's crossed up much much more severely so when you are above the uh this sort of pinkish area up here we are overbought and then if we are down here where we want second of december we are oversold that's the theory of this now as always if you do follow me a lot you will know i'm a fan of looking at a couple of indicators together and getting a more clear indication where things are heading i think one on their own doesn't really doesn't really tell you the whole story uh and that's what what i used to do when i was at an as an investment banker here in hong kong for a little while so we have a we are in that overbought territory we had a very nice little trend up here and now we are coming down a bit and then up again and then sort of fizzling out again a little bit so we are still on a sort of positive momentum here but it's a potential that we could go down a little bit if we are up here and i haven't bought in yet i would personally wait for us not just to cross the 50-point line here but i'd like to see a return up through it and i would then possibly buy at that point now remember guys as always this is not financial advice this is entertainment only i'm obliged to say that so let's look at a couple of other indicators see if we can get a little bit more in there i think bollinger bands we don't need to look at we'll know what they say we are above the moving average uh we can look at some momentum here up down here too and that shows generally speaking a pretty positive momentum story again i'm magnified for you guys on smaller screens you know momentum is growing quite nicely but are we going to see what we saw previously when we had those dips look at when we were at relatively high momentum levels we were at that sort of eight level here and then we did see shortly afterwards these sell-offs here and again um this little one here followed actually by a broader seller that continued there so is that where we are because we are bobbing along that very very high momentum line or is this going to keep going up well i would be quite cautious on this because you are seeing that line going down pretty quickly and i know the markets are open and um we're not seeing much negative sell-offs there as yet but i would be cautious i i think that this is potentially part of a little bit of a correction and that's what we see with with growth stocks we go down to the next little assistance level over the one below that and then that becomes sorry support level and then that becomes a stronger support and actually helps the longer term rally on this so let's have another look at another one here let's have a look at volume and and i'll have to zoom in on that for you otherwise you won't be able to see anything at all here so we had some very very strong buy and see in green you can see and then it fizzles out a little bit so volumes are actually very very low i guess a lot of people are just just watching and and waiting to see where this is going so for me from that point of view okay we are on a very positive uh trajectory here in in terms of you know where we are growing to you know we really are going up almost horizontally if you if you're looking at this uh that is a very very strong uh fan sort of as strong as you can get really but are we about to see a short-term correction i think there's a fairly decent chance of that and i'm not just saying because i want to buy the stock which i do and i want to want to get a little bit of a better in price on this but my personal view would be i think there is a good chance we're going to see a little bit of this happening and then perhaps a a recovery but we could see a bit of a correction because we had seen that we were at 43 97 or so um you know short while ago and let me just change the time zone down here for you guys so because we are looking at a hong kong time zone and that is a little bit confusing as this is trading in in the us minus six um did i put that right guys is it minus six or is it minus five it's minus five there we go so this makes a little bit more sense now in terms of timing um that you know we are here on the uh on the fifth of of january and um you know we are sort of moving moving down just a little bit here really um and yesterday we had a we had a very very nice rally um and and that's why the the market open is a bit odd because we did have a buy-in in pre-market which is very positive that's why it's up ten percent at the moment we are seeing a little bit of a flattening of that and look guys we are just seeing here some negative volume you're seeing a little bit of a sell-off there nothing substantial but uh we are seeing a little sell-off here and it's almost as big as the sell-offs we saw previously so i think there is a chance that we might see a a sell-off that reflects this and then perhaps uh 43-68 might be a good resistance point for that um i'm just going to put that in for you guys here also that's probably a a good resistance point and then i would say um let me move that up um well that's that's probably a stronger one here 37. i i'm not going to draw a retracement in here yet because we're not really seeing a severe downturn but we are seeing a bit of that see the stock price in in new york now life has gone from 10 up to just seven and a half percent up so it is the the excitement pre-market is wearing off a little bit as some people are taking profits and why is that well we are near near uh we wear this morning certainly it's an all-time high of just under 50 and and that is a psychological uh barrier there to get about 50 so we're gonna i think we're going to retrace here a little bit i'm going to keep an eye on this guys i'm going to keep telling and i will tell you exactly when i buy in and why i'm doing it i i am very excited about this i'm not going to put 50 of my portfolio into this it is a relatively small company but it is the only listed exposure you can have to this kind of technology and i do think it is the future i think uh roads are so congested and yes we are all excited about evs and all of that and all the ai numbers driving it'll help but people are just buying more more cars uh and that just makes congestion worse and there are certain logistics applications i think where speed is of the essence not just for food delivery but they're actually emergency issues i think governments will will take this up i think police will actually like this a lot i think from a sort of overview survey security point of view i think these drones are quite important also i think firefighting is a very very clever fairly niche application but there are a lot of high-rise buildings in china as we just saw and then longer term the taxi thing i think that's quite a few years away really but the the deliveries i mean you see that in the us you see you know amazon drone deliveries and these kind of things uh and and there is a big potential that but imagine if you live in a country where basically everybody uh with with relatively high income lives in very very high density cities and that's what china is that is ideal for these drones because the distance they can fly is still relatively limited with with the load in china they don't need to go very fast as long as they're like we'll go a couple of miles they can be seeing that trial and dog one they can go eight miles so for me this is a very exciting story i do think the stock is relatively expensive at the moment there's a lot of momentum in this uh and just hot cash i mean you know look what central banks are doing there's a lot of cash just flowing into the markets so it is a pretty high price point there i'm gonna see if i can get this at a little bit more of a of a discount and i will then get in on this and i will definitely post the video and let you guys know so thanks guys if you enjoy these videos hit the subscribe and like button our subscript subscriber base our community is growing it's doubling every nine days that's the kind of compounded growth we'd like to see in equities as well so thank you all for that support do hit the like button and turn on new alerts we also do lives pretty much every single day and certainly whenever there is something really exciting happening i'm here live from hong kong so guys that's the wrap from me thanks very much for tuning in let me know what you think on eh below in the comments and and do share this with your friends and investment community and let's grow this community we have here
2021-01-22 17:22
