Shares of Chinese flying car company EHang Holdings (NASDAQ:EH) rose almost 7% on Dec. 26 and another 4% overnight. The gains came after EHang opened its demonstration center in the Chinese city of Shenzhen, near Hong Kong.
EHang’s new center is a marker on the road to revenue for EHang’s electric vertical takeoff and landing aircrafts (eVTOLs). The company’s aircraft can reportedly take payloads up to 1,500 pounds across a range of 20 miles.
Shares opened Dec. 27 at $17.70 each, representing a market capitalization of $1.05 billion, and analysts are hoping for $60 million in revenue next year.
EHang Hanging In
EHang ended September with $36 million in cash and short-term deposits after a $10 million operating loss in the quarter.
The company’s flying cars are designed to run autonomously, which has helped the stock. InvestorPlace contributor Tomas Levani wrote in November that the stock’s technical indicators are all good.
The bull case is helped by the company’s receipt of an air-worthiness certificate from Chinese regulators. Its new center includes everything needed for flights between Shenzhen and Hong Kong, including a passenger waiting area. The facility is 50,000 square feet.
EHang says it’s the first eVTOL company in the world to achieve type certification from a local regulator, adding that deliveries of its aircraft have begun. The first was to a government-controlled entity near its headquarters in Guangzhou.
But EHang has its detractors, like Hindenburg Research. A November report from the short-seller questions whether 1,300 orders for the aircraft are accurate. It also notes insiders haven’t been buying the stock. Fintel reported that 22% of EH stock is now held short, including almost 60% held off listed exchanges.
What Happens Next for EH Stock?
The launch of EHang’s heliport and deliveries puts a target on the company’s back. It will no longer be judged based on hype but on results.
As of this writing, Dana Blankenhorn did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.
