EHang Sets Terms for New York IPO Worth Up to $46 Million

The AAV developer is scheduled to debut on the Nasdaq on Dec. 12 under the ticker symbol "EH."

CapitalWatch Staff
    Dec 05, 2019 8:00 PM  PT
EHang Sets Terms for New York IPO Worth Up to $46 Million
author: CapitalWatch Staff   

EHang Holdings Ltd., ahead of its scheduled initial public offering in New York next week, has set the pricing terms.

In a filing with the U.S. Securities and Exchange Commission on Thursday, the Guangzhou drone company said it intends to sell 3.2 million American depositary shares in the price range of between $12.50 to $14.50 each.

At the high end of the range, EHang would raise $46.4 million in its IPO, with an additional 480,000 ADSs optional for over-allotment. Underwriters on the deal are Morgan Stanley & Co. LLC, Needham & Company LLC, Tiger Brokers (NZ) Ltd. and Prime Number Capital LLC. Credit Suisse Securities (USA) LLC was no longer listed as an underwriter.

EHang's mission is "to make safe, autonomous and eco-friendly air mobility accessible to everyone," according to its prospectus. It makes autonomous aerial vehicles (AAVs) and provides related commercial solutions. It aims to deliver technology for passenger transportation, logistics, smart cities and aerial media, among other uses.

The company's partners include DHL-Sinotrans, Vodafone GmbH and FACC.

For the nine months through September, EHang reported revenue of $9.4 million, up 20% year-over-year. Net loss narrowed 4% from a year ago to $6.7 million, the company said. For the full year 2018, EHang posted $9.3 million in revenue on $11.3 million in losses.

EHang intends to use the proceeds of its IPO to expand its production capacity, to boost research and development, and for general corporate purposes, including working capital and investments, according to its prospectus.

In his analysis of EHang's upcoming IPO, CW columnist Donovan Jones, creator of VentureDeal, said the company may seize the opportunity in a market bound for sharp growth, but faces intense competition.

"Management will need to be nimble in pursuing sales in countries or regions that provide favorable regulatory policies to encourage continued testing and use cases for this nascent technology," Jones said.

"Additionally, EH is competing against very large and deep-pocketed firms with extensive operations, so at this point should be seen as an 'underdog' in the burgeoning world of autonomous aircraft."

EHang's shares are set to lift off in trading on the Nasdaq Global Market next Thursday, Dec. 12, under the symbol "EH."