EHang Holdings Ltd. (Nasdaq: EH) continues to counter the short seller claims, releasing more supposed proof on Monday that its relationship with its client Kunxiang is legitimate.
The Chinese company, a player in the urban air mobility space, said Shanghai Kunxiang Intelligent Technology Co., Ltd. is one among many clients of EHang and is by no means the main one, as Wolfpack Research claimed in its report last week.
EHang stated that (1) in 2019, its revenues from Kunxiang made up 24% of all revenues; (2) these were from the sales of 23 passenger-grade autonomous aerial vehicles (AAVs); (3) total revenues from these sales made up 29.2 million yuan; (4) reference numbers of the units sold were listed; (5) 71% of the revenues have been collected so far; (6) Kunxiang has conducted trial flights of EH216 in 17 cities across China, which can be supported by various local media; (7) Kunxiang focuses on aerial tourism and is no longer EHang’s biggest client.
EHang also said it was taking legal actions against Wolfpack Research “for its malicious act and false allegations.”
Last week, the short-seller called EHang an “elaborate stock promotion,” alleging the company fabricates its 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.”
The statement today is the third denial by EHang in the week since Wolfpack published its allegations. In attempts to prove it’s no Luckin Coffee (OTC: LKNCY) and bump its stock to earlier highs, EHang has been posting updates on its developments left and right, on Friday releasing some details, photos, and a video of its new AAV production facility in Yunfu city.
The facility, with an area of 24,000 sq meters, it said, will house “EHang’s newest aerial vehicle assembly lines, a Computer Numerical Control (CNC) processing center, a painting workshop and a carbon fiber composite materials processing area. In addition, the Yunfu facility will include a research and training center and an outdoor flight test vertiport.”
It also invited investors for a tour in June 2021, with further details to be announced. Production at the factory is planned for the second quarter, according to the report.
EHang has gained some supporters in the face of analysts at Karreta Advisors, who published a report on Seeking Alpha called “EHang: In The Right Place At The Right Time.”
Meanwhile, more investors’ rights litigators have picked up the case against EHang. Levi & Korsinsky, LLP, Bragar Eagel & Squire, P.C., The Thornton Law Firm, Rosen Law Firm are among those calling on EHang investors to join in the class action lawsuit against the drone maker.
On Monday, following the general downward market trend, EH stock was down an additional 9% intraday, traded at $54.70 per American depositary share. So far, it has lost more than half its market value from its high of $123 per share a week ago.