EHang: A Stock Promotion Destined to Crash and Burn
February 16, 2021
Today, we reveal why we believe EHang NASDAQ: EH is an elaborate stock promotion, built on largely fabricated revenues based on sham sales contracts with a customer who appears to us to be more interested in helping inflate the value of its investment in EH i.e., pump EH’s stock price than actually buying its products. EH has perpetuated its story with a collection of lies about its products, manufacturing, revenues, partnerships, and potential regulatory approval of its purported main business, an “ autonomous” aerial vehicle “AAV” ridesharing network.
Summary
We conclude that EH’s relationship with its primary purported customer is a sham. Government records and credit reports show that EH’s major customer is Shanghai Kunxiang Intelligent Technology Co., Ltd. hereinafter referred to as “Kunxiang”. We have gathered extensive evidence including behind-the-scenes photographs, recorded phone calls, and videos of on-site visits to EH’s various facilities, as well as Kunxiang’s offices which lead us to believe that Kunxiang signed sham sales contracts to benefit its investment stock price in EH
• Kunxiang has an exaggerated physical presence and its real operations appear to be a fraction of what is claimed. Out of the 3 addresses listed on Kunxiang’s website, one is a hotel with no Kunxiang presence, one is a 13th floor address of an 11-story building, and the last one had only one Kunxiang employee in the office on a weekday afternoon.
• To the extent Kunxiang actually does sell vehicles, it did not want to sell EH’s products to us. When asked, the only employee on-site at Kunxiang, who claimed to be the finance manager, had no hesitation voicing his disapproval of the EH216, and instead offered their own, supposedly much higher quality products for sale.
• Kunxiang appears to be a willing participant in EH’s stock promotion. According to the same finance manager at Kunxiang, Kunxiang made an undisclosed RMB100 million ~$14 million pre-IPO investment in EH, which leads us to believe its true motive for signing these shambolic contracts was to benefit its investment, which is worth ~RMB473 million ~$68 million today.
• As is common with a sham customer, SAIC files and national credit reports show that Kunxiang was established just 9 days before it signed a RMB450 million ~$65 million sales contract with EH. Kunxiang had only RMB10 million ~$1.4 million of registered capital, rendering far too thinly capitalized to actually fulfill this purported sales contract. Nonetheless, Kunxiang signed another RMB30 million ~$4.3 million contract with EH four months later.
• One of the sloppiest details of this “customer/supplier” relationship, the first purported sales agreement between EH and Kunxiang provides that Kunxiang will supposedly pay a per unit “per set” price of RMB150 million ~$21.5 million. We assume that before the second purported agreement was signed four months later, EH realized that the unit price was too high to be believable and cut it to RMB1.5 million ~$215k, 1% of the price in the first contract.
• Between September 10, 2019 and October 31, 2019, EH filed a confidentiality request with the SEC to redact the prices on these contracts, likely because the prices are so absurd that they would ruin EH’s credibility if seen by investors or competitors. We only found the unredacted versions of these contracts within the SEC’s EDGAR archive
Also common with a stock promotion, EH has only collected on a fraction of its reported sales since its mid-December 2019 IPO. We see EH’s collection rate of only 20% and DSOs at nearly 200 days despite its purported credit terms of up to 180 days as a clear indication of fabricated revenues.
• EH has reported RMB125.5 million ~$18 million in total revenues since its December 2019 IPO.
• During the same period, its accounts receivable increased by RMB96.2 million ~$13.8 million.
• This means that EH has only collected RMB25.2million ~$3.6 million in cash since becoming a publicly traded company. Typical of a stock promotion, in just 14 months as a publicly traded company, EH’s PR team has put out 50 press releases, according to Globe Newswire. However, EH’s constant stream of press releases are easily proven untrue. For example:
• EH has announced numerous “flight certifications” and “long-term ” approvals for its “passenger-grade” EH216 in the US, Canada and various countries throughout Europe.
• According to aviation regulators or experts in aviation regulation in the US, Canada and Europe, EH has only received permits for recreational test flights of its drones in specified areas, below a specified altitude and at a specified time. In no way are these permits endorsements of EH’s “passenger-grade” claims, nor are they “regulatory breakthroughs” of any kind.
• EH also claims in an English PR to have received the “World’s First Commercial Pilot Operation Approval of Passenger-Grade AAVs for Air Logistics Uses” from China’s CAAC. However, the title of the Chinese version of the same PR says nothing about “commercial” or “passenger- grade” What EH obtained was “特定类无人机试运行批准函” special approval letter for trial runs of drones of a specified class. CAAC had granted the same license to at least one other company in Hangzhou, China one year earlier in 2019.
• EH consistently makes different claims regarding regulatory approvals in the English and Chinese versions of its press releases. In English, EH makes false claims of commercial approval of its vehicles the EH216 by Chinese regulators. In its Chinese press releases, EH makes false claims of commercial approvals by regulators in the US, Canada, and Europe.
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EHang: A Stock Promotion Destined to Crash and Burn
February 16, 2021
Today, we reveal why we believe EHang NASDAQ: EH is an elaborate stock
promotion, built on largely fabricated revenues based on sham sales
contracts with a customer who appears to us to be more interested in helping inflate the value of its investment in EH i.e., pump EH’s stock price than actually buying its products. EH has perpetuated its story with a
collection of lies about its products, manufacturing, revenues, partnerships, and potential regulatory approval of its purported main business, an “
autonomous” aerial vehicle “AAV” ridesharing network.
Summary
We conclude that EH’s relationship with its primary purported customer is a sham. Government records and credit reports show that EH’s major customer is Shanghai Kunxiang Intelligent Technology Co., Ltd. hereinafter referred
to as “Kunxiang”. We have gathered extensive evidence including behind-the-scenes photographs, recorded phone calls, and videos of on-site visits to
EH’s various facilities, as well as Kunxiang’s offices which lead us to
believe that Kunxiang signed sham sales contracts to benefit its investment stock price in EH
• Kunxiang has an exaggerated physical presence and its real
operations appear to be a fraction of what is claimed. Out of the 3
addresses listed on Kunxiang’s website, one is a hotel with no Kunxiang
presence, one is a 13th floor address of an 11-story building, and the last one had only one Kunxiang employee in the office on a weekday afternoon.
• To the extent Kunxiang actually does sell vehicles, it did not want to sell EH’s products to us. When asked, the only employee on-site at
Kunxiang, who claimed to be the finance manager, had no hesitation voicing
his disapproval of the EH216, and instead offered their own, supposedly much higher quality products for sale.
• Kunxiang appears to be a willing participant in EH’s stock
promotion. According to the same finance manager at Kunxiang, Kunxiang made an undisclosed RMB100 million ~$14 million pre-IPO investment in EH, which
leads us to believe its true motive for signing these shambolic contracts
was to benefit its investment, which is worth ~RMB473 million ~$68 million
today.
• As is common with a sham customer, SAIC files and national credit
reports show that Kunxiang was established just 9 days before it signed a
RMB450 million ~$65 million sales contract with EH. Kunxiang had only RMB10 million ~$1.4 million of registered capital, rendering far too thinly
capitalized to actually fulfill this purported sales contract. Nonetheless, Kunxiang signed another RMB30 million ~$4.3 million contract with EH four
months later.
• One of the sloppiest details of this “customer/supplier”
relationship, the first purported sales agreement between EH and Kunxiang
provides that Kunxiang will supposedly pay a per unit “per set” price of
RMB150 million ~$21.5 million. We assume that before the second purported
agreement was signed four months later, EH realized that the unit price was too high to be believable and cut it to RMB1.5 million ~$215k, 1% of the
price in the first contract.
• Between September 10, 2019 and October 31, 2019, EH filed a
confidentiality request with the SEC to redact the prices on these contracts, likely because the prices are so absurd that they would ruin EH’s
credibility if seen by investors or competitors. We only found the
unredacted versions of these contracts within the SEC’s EDGAR archive
Also common with a stock promotion, EH has only collected on a fraction of
its reported sales since its mid-December 2019 IPO. We see EH’s collection rate of only 20% and DSOs at nearly 200 days despite its purported credit
terms of up to 180 days as a clear indication of fabricated revenues.
• EH has reported RMB125.5 million ~$18 million in total revenues
since its December 2019 IPO.
• During the same period, its accounts receivable increased by RMB96.2 million ~$13.8 million.
• This means that EH has only collected RMB25.2million ~$3.6 million
in cash since becoming a publicly traded company. Typical of a stock
promotion, in just 14 months as a publicly traded company, EH’s PR team has put out 50 press releases, according to Globe Newswire. However, EH’s
constant stream of press releases are easily proven untrue. For example:
• EH has announced numerous “flight certifications” and “long-term
” approvals for its “passenger-grade” EH216 in the US, Canada and various countries throughout Europe.
• According to aviation regulators or experts in aviation regulation
in the US, Canada and Europe, EH has only received permits for recreational test flights of its drones in specified areas, below a specified altitude
and at a specified time. In no way are these permits endorsements of EH’s
“passenger-grade” claims, nor are they “regulatory breakthroughs” of any kind.
• EH also claims in an English PR to have received the “World’s
First Commercial Pilot Operation Approval of Passenger-Grade AAVs for Air
Logistics Uses” from China’s CAAC. However, the title of the Chinese
version of the same PR says nothing about “commercial” or “passenger-
grade” What EH obtained was “特定类无人机试运行批准函” special approval
letter for trial runs of drones of a specified class. CAAC had granted the
same license to at least one other company in Hangzhou, China one year
earlier in 2019.
• EH consistently makes different claims regarding regulatory
approvals in the English and Chinese versions of its press releases. In
English, EH makes false claims of commercial approval of its vehicles the
EH216 by Chinese regulators. In its Chinese press releases, EH makes false
claims of commercial approvals by regulators in the US, Canada, and Europe.
又一家瑞幸咖啡？
是被对手黑？
技术和概念都是非常牛逼的。
周五就想卖的，今天观望一下卖在112.真他么险。
跌到5块入10股玩玩
麻痹是先pump再空，准备好再放消息。
坏人太多了。
现在都搞不清楚这些空到底是不是和庄一边的，最后受罪的是美国这边的小伞。
抄早了
还能翻身不
操蛋，真是老鼠屎啊。。。
这家wolfpack太可疑了，亿航上周没有消息大涨四天就感觉不对，所以一直盯着，果然。真他妈黑。
今天太傻逼了，y以为EH只是单纯被做空，还接了点EH飞刀。没有当机立断割肉，现在所
有浮盈全还回去了，还亏了1000割肉了。以后看突发新闻还是要仔细点。
为啥怪wolfpack?
亿航可以出来解释的。
【 在 StMicheal (archangel) 的大作中提到: 】
: 这家wolfpack太可疑了，亿航上周没有消息大涨四天就感觉不对，所以一直盯着，果然
: 。真他妈黑。
现在中国半夜，这个时机是精心选择的吧。
【 在 yyber (忍而不发) 的大作中提到: 】
: 为啥怪wolfpack?
: 亿航可以出来解释的。
买了100股，多好的概念。财务造假最多罚款，概念好。跌倒30，就买1000股。
明天上涨20%。
中国白天，美国故事不开盘啊
【 在 StMicheal (archangel) 的大作中提到: 】
: 现在中国半夜，这个时机是精心选择的吧。
这些公司如果虚假做空，能否小三控告它们？EH最怕美的制裁，美的脱轨，否则中共好容易有了高科技不大力扶持？比搞水泥基建好。
盘后再涨，收盘前非常想抄底的。
概念太好了。
没营收也是好股票。
【 在 fuqiang (日能) 的大作中提到: 】
: 明天上涨20%。
不是造假，会跌成这样吗？单纯被做空不会这样的，你卖在112实在太幸运了，我78的
cost都亏了1000多。
【 在 StMicheal (archangel) 的大作中提到: 】
: 盘后再涨，收盘前非常想抄底的。
: 概念太好了。
: 没营收也是好股票。
股市到处是机会，别处发财就好了。我也是侥幸，单纯觉着上周涨法没法儿持续，今天本来就要卖的，毕竟只是个概念股。
【 在 egaisi (worrying) 的大作中提到: 】
: 不是造假，会跌成这样吗？单纯被做空不会这样的，你卖在112实在太幸运了，我78的
: cost都亏了1000多。
买少了，只有100股。明天盘前至少上涨20%。
尾盘下跌的角度真陡
已经反弹20%了，明天估计上60？
EH接下来的走法会不会和QS一样？
没有美的制裁，股票年底前上200。一直找不到机会上，感谢做空报告，给上车机会啊
。
会和瑞幸一样
【 在 LostAngeles (大天使) 的大作中提到: 】
: EH接下来的走法会不会和QS一样？
re