The EHang Report Easily ExplainedEHang (EH) is an urban air mobility company, which is just a fancy way of saying drone, from China.
Ehang’s stock crashed a whopping 62%, from $122 to $46, after a report was released.
This report was released yesterday from Wolfpack Research, and I would like to go over some of the most important points from the report.
Disclaimer: This is not investment advice. This is for educational and entertainment purposes only. I am not responsible for the profits or loss generated from your investments. Trade and invest at your own risk.
EHang's Empty Facilities
The report starts with a brief summary of why EHang is a complete scam.
Analysts from Wolfpack research visited EHang’s corporate headquarters / main manufacturing facility, and found out that it was practically empty.
They roamed around the facility for 20 minutes, and couldn’t find anyone.
The facility lacked advanced manufacturing equipment, a basic assembly line, and the hardest worker in the company was apparently this one security guard who was sitting down on the ground behind the bushes.
This is surprising given that EHang supposedly claims to be full of world class proprietary technologies, sells drones that cost close to $300,000, and manufactures a product that could put the lives of its customers at risk if it were to be stolen, improperly operated, or tampered with.
Wolfpack research has a good track record of having exposed other China-based companies, and the fact that the facility was completely empty just seemed awfully familiar.
While the facility being empty doesn’t necessarily mean that EHang is a complete scam, at the least, it’s a good indication that the business is not what it claimed to be in the SEC filings.
Pre-Manufactured Parts
Besides employees, they also couldn’t find any industrial grade manufacturing machinery, assembly line, raw material inventory, or special work zones, which are actually very common in automobile or drone factories.
Instead, it seemed highly likely that EHang was simply assembling pre-manufactured parts, as they found hundreds of boxes for parts that are used in EH216.
They weren’t able to find any raw material or production equipment, and logically thinking, based on how small EHang’s actual input in creating the product is, it’s legally disputable as to whether the company can claim that their products are “manufactured by EHang”.
As a comparison, they compared XAG’s facility to that of EHang’s, and both companies are located in Guangzhou. XAG manufactures unmanned drones and they look like a legitimate factory.
So EHang, which manufactured drones that carry passengers, should look more robust than this.
Even when comparing EHang to Robinson, a small helicopter company that is a potential competitor for EHang, Ehang’s facility looks nothing like theirs.
The Yunfu Factory
The analysts then debunk a lot of claims that EHang made about their supposed “manufacturing facility” in Yunfu.
The first claim was that EHang had built a new production facility in Yunfu, but this turned out to be deceiving.
While there was a large facility, EHang had simply rented the facility, and was in the process of retrofitting it.
The second claim that EHang made, was that they had started manufacturing at the Yunfu factory in December 2020, but this claim was also false.
This is what the reception for the factory looked like, and analysts were told by the Yunfu Park Committee that construction wouldn’t be complete until around February 2021.
Most of the areas in the factory were either under construction or completely empty.
And obviously, there weren’t any manufacturing equipment or assembly lines.
The management committee also said that they were “uncertain whether or not Yunfu EHang’s funding would be available”, which raises a lot of questions about EHang’s supposed government support for this facility.
Dr. Moore and T Motors
Wolfpack spoke to Dr. Moore, who is the director of engineering for aviation at Uber, and discovered that Ehang uses hobby grade motors, which are not meant to propel aircrafts that carry passengers.
Dr. Moore said that he “closely inspected and analyzed their configuration, and I see no significant IP anywhere."
"They were using T motors. Those are hobby grade motors. Those are not aerospace products.”
So then Wolfpack immediately went to research T motors, a Chinese hobby grade motor.
In the custom section, where they offer original design manufacture services, or ODM services, they found something very familiar.
In case you don’t know what ODM is, basically, T motor lets EHang choose the color of the motor casing, and lets EHang put their logo on parts that are designed and manufactured by T motors.
Based on this, Wolfpack Research concluded that EHang was conducting light-assembly of parts they purchased from ODMs, whose motors shouldn’t be used to carry passengers.
Kunxiang
They also claimed that EHang created a paper company called Kunxiang, in order to pump up the stock’s price.
2 out of 3 addresses for the company Kunxiang were false, with one being an address for a hotel, and another being for an office located on the 13th floor, when the building itself had only 11 floors.
Sham contracts with Kunxiang had been fabricated to pump up revenue, and make it seem like the company was growing at a rapid pace.
Wolfpack Research believes that a whopping total of $33.4m from EHang’s entire revenue appears to be from sham contracts.
Not to mention the fact that EHang has only collected cash for 20% of its reported revenue since its IPO, which amounts to $3.6m.
What’s really suspicious about this is that they don’t charge interest on late payments, nor do they ask their clients for collateral.
Deceiving Press Releases
Most importantly, EHang has made extremely misleading press releases.
In their Chinese press releases, they talk about misleading statements regarding regulations and licenses granted by the US and Canada.
Conversely, in the English press release, they talk about regulatory approvals in China, so that both Chinese and Western investors have no idea as to what is actually happening.
This is extremely deceptive.
They have also omitted key words like ‘short term’, ‘one time’, ‘trial’, or ‘test’, when describing their flight approval, and add words like ‘passenger-grade’ and ‘commercial’, when describing their license.
Ehang's Rebuttal
To be fair, EHang has released a statement with the title: Ehang responds to deceptive Wolfpack Research Report.
They say that they have forward-looking projections, statements, and predictions that are reasonable, and it’s not that they’re outright scamming, but that there are certain risks and uncertainties beyond the management’s control.
To me personally, their report is not convincing at all.
Conclusion
The field of urban air mobility actually has potential.
But with companies like EHang marrying social perception, innovation will be hindered.
We’ve seen Nikola (NKLA) do this with hydrogen cars, and it seems like EHang is doing something similar, just to a worse degree.
An SEC-led investigation is imminent.
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Chinesestocks
LIZHI INC. Issues Letter to ShareholdersLIZHI INC. Issues Letter to Shareholders
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Xpeng, why not?Almost 40% below its November all-time high.
Close to touching its 55 EMA.
He still has some left to go to the oversold point in stochastic, but it could be a good entry point.
If it reacts to its moving average and the trend continues, it could return to a high of $ 70 between now and March.
The most that could fall is around $ 40.
"Xpeng or Xiaopeng Motors is a Chinese electric vehicle manufacturer."
NYSE:XPEV
FUTU Trade Recap
Purchased the $FUTU $55 Call a little early and experienced a quick break down out of our bullish declining wedge (blue). Didn't go exactly as predicted but I held -70% loss at one point for a great play coming out at ~135% gain on initial investment by following my indicators and price action levels. (Blue & yellow)
Can present itself to be a continuation play tomorrow for a good day trade. Still holding 1/3 of initial position .
$NIO BUY THE DIP!Alright a lot of you probably interested in this one, NIO been pulling back much less than it's peers and for good reason. They practically own the infrastructure space in China for EV at the moment with their services and battery swap stations. Any weakness in this name be a good reason to add shares for longer term. I been selling weekly puts for over a month now on this name trying to acquire shares without luck, but getting paid to wait is not a bad idea. This be the time to start going in. I sold more puts for $40 and $36 today. If it pulls back to the $30 area, I'm going to back up the truck on this one. Support areas around $41, $38 and $33, should not go lower than that, if it does, load up on those leap options.
Buy Signal: 133.55Ingenuity Trading Model used in- Stock, Forex, Futures, and Crypto markets
The model is a Geometric Markov Model :
In probability theory, a Markov model is a stochastic model used to predict randomly changing systems. Markov Models are used in all aspects of life from Google search to daily weather forecast. The randomly changing systems we focus on are the equity, futures, and forex markets. The geometric element of the model is the fractal wave structure you can find on any chart you look at across any market and across all time dimensions.
Our model focuses on the current wave formation (current state)- geometric price formation along with its volume and volatility over a given time period and using that information to predict the future state- future price movement. For questions or more information like stops and trade management feel free to contact me in the comment section or via private chat
Re-accumulation phase for Alibaba before markup I believe BABA has shown us the first levels of its trading range at the $315 level and $255 level and I think this is the range we will see the strong hands start accumulation before the Ant IPO for the markup. I will be swinging BABA in this range until it’s time for the final rally up in its final phase of this range.
Chinese Yuan-- From 2008 to nowMeasured move shows the previous wave cycle was corrective, making the next cycle the impulsive wave.
*Since Yuan was introduced since 1955, there no use for making upward measured move target with incomplete data.
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Fundamentals// that China is not willing to keep print money like before+ US printing $$$
ridethepig | Chinese Equities ... The Slaughtered PigThe "hanging" candle
The problem is as follows:
If the only way to reach risk-on in and remove social distancing is either via a vaccine (most preferred option although not really in scope till 2021) or further extreme lockdown measures (as you all know extremely costly and damaging to the monetary side) to completely remove the virus from circulation. With all roads towards confidence blockaded, it's more advisable to take a contrarian stance to the equity promoters.
This is not an easy one to add too. It depends on the circumstances next week, namely on the virus front as Europe looks set to follow the US and lose control. This is something I would like you all to anticipate: it is all too easy as for the Robinhood pawns who tend to be weak when tested.
The flows are as follows:
1️⃣ the flows themselves in US equities are open to attack
2️⃣ the final nail in the coffin comes from long bonds which are too much pressure to maintain: this means that the necessary complacency forces retail to buy all the junk while those smart enough unload and exert Puts / shorts.
Here the notion of parking capital in China in the short-term turns out to be deceptive and soft. Once more the reason can be found in the previous SHCOMP swings: in diagrams attached below you will see excellent examples of PBOC blockaders and failures.
Ride the PBOC, Feb 3rd 2020
The attempt to ride the CB flows, the hanging lows were relatively obvious and panic creates weakness which can be bought with confidence like passing clouds.
SHCOMP Market Commentary, Feb 24th 2020
The pullback was a result of the PBOC and sharp hands. Many moons ago I would've been convinced by this market...not today.
This leads to the long run choppy conditions and unfavourable outcome of soft hands who placed their stops too blatently. The sell side is still there on the move, ride weakness is the strategy and balance out at key support levels.
Thanks for keeping the feedback coming 👍 or 👎
Shanghai: Still some upside before profit taking kicks in.SHCOMP has formed a Golden Cross on the 1D chart turning vastly overbought (RSI = 89.841, MACD = 105.710, ADX = 52.201). Last time that took place within the long-term Channel Up that started in January 2019, the market consolidated for a few days and delivered a last peak in a month. The MACD has entered into this red Resistance Zone of the 2019 consolidation, so there are high probabilities that investors won't close massively positions and let profits run a little higher towards the 3,580 2 year Resistance (January 2018 Top).
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Tencent Music Ent. $TME "Brekout"$TME just broke $13.37 out with high volume. RSI is still below the trendline though. There might be a pull back but it is very strong for an upside rally.
12 months Consensus Price Target: $16.11
if you find my charts useful, please leave me "like" or "comment".
Please don't trade according to the ideas, rely on your own knowledge.
Thx
Luckin Coffee $LKChinese coffee giant is pulling back after long rally down. I would expect to meet with 20SMA before it decides its direction
12 months Consensus Price Target: $40.50
if you find my charts useful, please leave me "like" or "comment".
Please don't trade according to the ideas, always rely on your own knowledge.
Thx
$NIO brokeoutNIO broke out the buying point yesterday and hit the resistance of $5.65. TP1 and TP are shown on the chart
12 months Consensus Price Target: $3.74
if you find my charts useful, please leave me "like" or "comment".
Please don't trade according to the ideas, rely on your own knowledge.
Thx
GSX TECHEDU $GSX "Head-and-Shoulders Bottom"It needs to hold above the confirmation resistance which is $31.37.
The resistances till target price are;
$32.80
$34.58
$36.35
If you find my charts useful, please leave me "like" or "comment".
Thx
BABA Analysis (ALIBABA GROUP HOLDINGS LTD)When NYSE:BABA closes significantly above the green rectangle area (Significantly above the 201.5) , I think it would very likely to continue up to around the 209-210 area (Around first blue line) , with a potential to reach the 219-220 level (second blue line) , depending on how price would act around the 209-210 area .
ALIBABA GROUP HOLDINGS LTD Analysis .I think NYSE:BABA needs to provide much more confirmation before one considers buying this stock .
I can think of these scenarios :
First scenario :Price doesn't go any lower than 192.9 after the opening and price goes up to test the blue resistance line and then closes considerably above the blue line /200 area , in this case I think it's a confirmation to buy and set a target at around 208.5 .We could even break above the green line and that would be an even stronger buy signal with a first target at around 216 and a good potential to hit the 230 (second target)
Another scenario : Price drops considerably below the 192.9 which would make the blue line almost useless , and continues droping to around the black line at around 186.5 , that would be a level with high probability of a bounce up and winning a buy entry with a target set at around 193.
In case price closes considerably below the blackline , it would be a rather sell signal with a target set at around 178 .
GSX TEXHEDU $GSX$GSX is just hitting the down trendline. It is above Fib 0.618 so far. If it succeed to hold above, will continue to rise.