Caixin
Nov 04, 2019 07:47 PM
BUSINESS & TECH

Air-Taxi Maker Looks for Lift With Wall Street Listing Plan

An Ehang 216 air taxi, the creation of Chinese drone manufacturer Ehang, makes a test flight on April 4 at a soccer stadium in Vienna, Austria. Photo: IC Photo
An Ehang 216 air taxi, the creation of Chinese drone manufacturer Ehang, makes a test flight on April 4 at a soccer stadium in Vienna, Austria. Photo: IC Photo

Autonomous aerial-vehicle maker EHang Holdings Ltd. has filed for a New York IPO, becoming the latest in a recent flurry of money-losing high-tech firms seeking to raise relatively modest sums through such overseas listings.

An earlier company from that wave, profitable online real estate marketplace operator Fangdd Network Group Ltd., became one of the first from the group to start trading its shares, posting a lackluster debut last Friday. The weak debut and modest fundraising goals reflect the relatively lukewarm reception that many companies are now getting as a bigger wave of Chinese technology listings in the U.S. and Hong Kong moves into its third year.

EHang, whose drones can ferry one or two passengers at a time, has set an initial fund raising target of about $100 million, according to its prospectus filed on Thursday in the U.S. In addition to major investment banks Morgan Stanley and Credit Suisse, the recently-listed Chinese online brokerage Tiger Brokers is also helping to underwrite the deal.

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EHang is still losing money, and its revenue shrank in the first half of this year as it ships a relatively small number of vehicles in its emerging space, according to the prospectus. It has delivered 38 of its driverless air taxis to date, mostly for experimental, instructional and demonstration purposes. It has signed orders for another 28 that haven’t been completed.

The company’s loss widened by 42% in the first six months to about 37.7 million yuan ($5.4 million), while its revenue fell 16% over the same period to about 32.4 million yuan.

Founded in 2014, the company started off as a maker of consumer-use drones before later switching into its focus on commercial-use models. Its current products can be customized to carry both human passengers and cargo. The passenger-carrying flying vehicles it produces have already been approved by China’s aviation authority for trial in certain areas to evaluate their performance.

A day after EHang filed its prospectus, earlier IPO candidate Fangdd raised about $80 million in its IPO, sharply lower than its original fundraising target of about $150 million. The shares ended their first day unchanged at the offer price of $13.

Contact reporter Yang Ge (geyang@caixin.com; twitter: @youngchinabiz)

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