And English lines are open for questions. And today's call is being recorded. Now I will turn the call over to Angie Yiheng, senior of Investor Relations. Ms. Anne, please proceed. Thank you all for joining us on today's conference call to discuss the company's financial results for 2025. The earnings release is available on the company's IR website. Please note the conference call is being recorded, and the audio replay will be posted on the company's IR website. On the call today, we have Mr. Huazhi Hu, our Founder Chairman and Chief Executive Officer, Mr. Zhao Wang, Chief Operating Officer, and Mr. Conor Yang, Chief Financial Officer. Before we continue, please note that today's discussion will contain forward-looking statements made pursuant to the Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, the company's actual results may be materially different from the expectations expressed today. Further information regarding this and other risks and uncertainties is included in the company's public filings with the SEC. The company does not assume any obligation to update any forward-looking statements, except as required under applicable law. Also, please note that all numbers presented are in RMB and are for 2025 unless stated otherwise. With that, let me now turn the call over to our CEO, Mr. Huazhi Hu. Please go ahead, Mr. Hu. Hello, everyone, and thank you for joining our call today.

In 2025, we continue to advance our business roadmap in a steady and disciplined manner. We delivered 42 units during this quarter, generating RMB 92.5 million in total revenue. Under our annual strategy of operations-driven sales, we proactively optimized our delivery pace and prioritized resources toward supporting existing customers in building regular operations, in order to establish sustainable commercial operating capabilities. As a result, delivery saw a temporary slowdown while new orders continue to grow strongly and our order backlog further increased. We believe this strategy will strengthen the foundation for commercial operations and drive EHang Holdings Limited's healthier, more sustainable long-term growth. This quarter, we achieved sustainable progress in product portfolio, product development, industrial deployment, and international expansion, laying a solid foundation for the next phase of growth. First, in terms of product portfolio, we continue to expand our product line this year to cover more diverse application scenarios in the low altitude economy. In October, we officially launched the VT35, our next-generation long-range lifting cruise pilotless human-carrying eVTOL. The VT35 has gone through a long six-year period from finalization to productization, integrating the advantages of eVTOLs while avoiding shortcomings of products with other configurations. Adopting an advanced tandem wing design, the VT35 maintains full aerodynamic efficiency and flight stability while minimizing the overall size of the aircraft. Its design range with a full load is at least 200 kilometers. This is only our conservative data under strict conditions. It can cover various medium to long-distance scenarios such as cities, islands, and mountain areas, clearly expanding the application scope of eVTOLs in intercity and regional transportation. Consistent with our safety-first principle, the VT35 adopts fully redundant systems and autonomous obstacle avoidance, ensuring further enhancements in safety. Meanwhile, the VT35 extensively uses the mature system architecture of the 216S, including…

In a modular box launch design deployment. The lightweight system with high precision positioning enables long-duration, highly stable flights, significantly enhancing visual effects and operational efficiency for aerial light shows. During the fifteenth national games held in Guangzhou, we deployed more than 11,000 GT4.0 drones for a night sky performance, making our largest formation record to date. We are also advancing development on several next-generation models, including the firefighting variant of the 216 series, the VT series logistics aircraft, and a two-seater configuration to support a broader range of commercial applications. Our joint venture with the Chang'an Automobile Yeon Zhihang has been formally established, and we will co-design and develop the next-generation product line, further strengthening industrial synergies and accelerating the diversification of our overall portfolio. In terms of industrial development, we continue to strengthen our manufacturing system and long-term capacity planning. Our strategic cooperation with the Menthe group deepened further this quarter, leveraging this expertise in lightweight structural components and intelligent cabin systems to enhance the core competitiveness of EHang Holdings Limited's eVTOL products. Meanwhile, our joint venture with Empower Yunfoo Yihon has entered a trial production for its phase two project at the Yunfu production base. Construction of our facilities in Hefei, Weihai, and Beijing is also progressing as planned, forming a full value chain layout across R&D, manufacturing, airworthiness, certification, delivery, and operations. As these major industrial bases come online, we expect to further strengthen our production capacity, supply chain resilience, and delivery efficiency. Internationally, we continue to advance global deployment in a steady and phased manner, establishing scalable market entry models through demonstration flights and local partnerships. During the quarter, we achieved notable progress across Asia, the Middle East, and Africa, including ongoing trial operations under Thailand's regulatory sandbox program and completing the Mideast's first intracity…

If you wish to ask a question, please press 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press 2. If you are on a speakerphone, please pick up the handset to ask your question. The first question comes from Tim Hazia with Morgan Stanley. Please go ahead. Hey. Hi.

I am Joey from Morgan Stanley. I would like the management to share more color on the sandbox initiative. Could you share more from the capital markets perspective in terms of the exact or rough timeline that we are currently looking at, particularly on specific or crucial stages like OC application, transition from trial operations to official commercial operations? And I've heard that you are currently expanding this sandbox initiative to four regions. So, collectively, what kind of scale are we looking at from this perspective? An additional separate question is that you are planning to replicate the sandbox initiative to other Southeast Asian countries. I was wondering, could management share any progress on that front? Are there any engagements that we are having with various countries in that region? Because we know that eVTOL is a good fit for many of these island countries. So could management share more color on that? Thank you. Thank you for your question. So, let me answer this question. Actually, in October, the regulators from Thailand, the civil aviation regulators from Thailand, have actually approved that we conducted AUM, a sandbox initiative in Bangkok. This is a point A to point B sandbox initiative. So the goal for us is to officially commence eVTOL commercial operations in the next three months. Currently, we are still conducting daily tests and we are submitting these test data to the civil aviation regulator in Thailand. Actually, just on Monday, the director general of Thailand's Civil Aviation Authority took a ride on our eVTOL, flying across the city center of Bangkok. This marks the very first of its kind for a director general of a civil aviation regulator to ride on an eVTOL. There is an important industry conference called IETL that's going to be held in…

Thank you. Your next question comes from James Zu from UBS. Please go ahead. Pardon me? What is the name of the line needed?

Pardon me? Hi, management. Thank you for taking my question. I was wondering why we are expanding into unmanned product portfolios, for instance, firefighting drones or eVTOLs as well as deformation performance drones. What's their contribution to our revenue and also profit? So could management share more on that? This is Huazhi Hu. Let me take your question. Actually, the low altitude economy encompasses or consists of both manned business and unmanned business. They are both critical components of this economy. With EHang Holdings Limited's decade-long R&D investments, we first set up manned operation as our goal because this is the most challenging sector as it involves flying men from the ground up to the sky, posing significant challenges. Over the years, we have accumulated a lot of technologies and patents. With our capabilities covering various travel distances and sizes of eVTOLs, we are able to tackle all of these problems. Actually, for our 216, it's a serious product. We have the 216S, which is for manned transportation, and we have 216L, which is dedicated for logistics, 216F, dedicated for firefighting, and 216LF dedicated for forest fire extinguishing. Additionally, we just launched the VT35 in October, which also has a model dedicated for logistics services and other application scenarios available. What we are trying to do is to maximize the technology that we have. We are going to introduce more models and expand our product portfolio to increase revenue. That's our strategy and how we are going about it in the low altitude economy. Maybe in the past, analysts were not following our unmanned products very closely. To achieve sustainable, healthy development, we need to extend our product portfolio to gain more market share. The reason why we focused on the demand of eVTOL is because it's the most challenging part, and that's the one we chose to focus on first. Hopefully, that's the first bit. As our manned eVTOL gradually enters commercial operation, we have been expanding the teams, recruiting more personnel, and trying to extend our unmanned business. We are trying to build a comprehensive product portfolio that can generate positive cash flow for the company. As we mentioned at the end of last year and earlier this year, we are trying to adjust the product mix and have a more diversified portfolio. Nevertheless, they all fall under the low altitude economy umbrella, so they are all going to be major businesses for our company. Going forward, you are going to see a much more diversified product mix, which will all contribute to the company's bottom line. Thank you.

Thank you. Your next question comes from Chen Yu from Guangfa Securities. Please go ahead.

Hi, management. Thank you for taking my question. I have two questions. One is on our VT35. Following the October announcement, we noticed that there is a one-unit delivery of the VT35 in Q3. I was wondering what the plan is for the airworthiness application as well as the type certificate application. The second question, perhaps I joined the call a little bit late. I'm not sure whether you have touched on that or not. We noticed that the gross profit margin for Q3 declined slightly. Will the gross profit margin stabilize at around 60%, and what's the cause of the decline for Q3 in gross profit margin? Thank you. This is Huazhi Hu. I'll take your first question. Actually, you're right. We debuted the VT35 model on October 13. We submitted the TC application as early as March, and the airworthiness application or review progress is progressing steadily. You may have noticed that we released the VT35 route flight demo at the October press conference. It has successfully completed multiple key tests, including wind tunnel tests, ground load tests, multirotor test flights, and many other tests. Additionally, the design of VT35 incorporates both the multi-propeller and fixed-wing. We have accumulated rich experience in our 216S airworthiness review process, and we are going to leverage those learnings together with the R&D team as well as the airworthiness application team that we have, which will accelerate the AC process. We are pretty confident in that.

On the gross profit margin, yes, you're right. It declined slightly. The causes behind that are, for one, there are repeat purchases from some of our existing major customers, which is a good thing. Also, we have made sales to some of the distributors where we offered some discounts. These two are the causes of the decline in the gross profit margin. With regard to the VT35, we delivered one unit this quarter. However, you should know that this model is still in the trial production phase and not being mass-produced. That's why the unit cost of this model is relatively high. But we have secured orders for VT35, which will hopefully bring down the unit cost of the VT35. Over the long term, we expect our gross margin to remain stable at around 60%, but you are going to see the gross profit margin fluctuate slightly as we introduce more products to enrich our product mix. For instance, the unmanned business such as the drone formation performance, firefighting, and logistic aircraft, etc., as that increases, it's going to cause fluctuations in the gross profit margin. But over the long run, we expect a 60% gross profit margin. Thank you.

Thank you. Your next question comes from Jason Sung with BDS Bank. Please go ahead. Pardon me. Your line may be muted. Pardon me, Jason. You may ask your question. Your line may be muted.

Once again, you may press star 1 to join the question queue. We'll now pause a moment to allow for any final questions. Pardon me. That is all the time we have for questions this evening. Thank you for participating. You may now disconnect.