Thank you for standing by, and welcome to the EHang first quarter 2022 earnings conference call. All participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I'd now like to hand the conference over to Ms. Julia Chan. Please go ahead.
Hello, everyone. Thank you all for joining us on today's conference call to discuss the company's financial results for the first quarter of 2022. The earnings release is available on IR website as well as from newswire services. Please note the conference call is being recorded and the audio replay will be posted on the company's IR website. Today, EHang's management team, which include Mr. Hu Huazi, Chief Executive Officer, Mr. Edward Xu, Chief Strategy Officer, Mr. Xin Fang, Chief Operating Officer, and Mr. Richard Liu, Chief Financial Officer. We are successfully giving prepared remarks. Remarks delivered in Chinese will be followed by the English translations. All translation is for convenience purpose only. In the case of any discrepancy, management's statement in the original language will prevail. A Q&A session will follow afterwards.
Before we continue, please note that today's discussion will contain forward-looking statements made pursuant to the Safe Harbor provision of the US 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 these 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 statement except as required under applicable law. Also, please note that all the numbers presented are in RMB and are for the first quarter of 2022, unless stated otherwise. With that, let me now turn the call over to the CEO, Mr. Hu Huazi. Please go ahead, Mr. Hu.
谢谢Julia。大家好，感谢各位今天参加亿航智能的电话会议。2022年第一季度以来，面临着宏观经济、国际局势、持续疫情和防控措施所带来的外部影响和不确定性，越在逆境中越要保持稳定。因此，我们更加聚焦。在发展自身的道路上，我们迎来了一个良好的开局，主要体现在全力推进适航认证、关键人才吸纳和市场开拓。首先，在适航审定方面，这依旧是公司目前发展的第一优先级。作为全球首个即将步入商业化的载人自动驾驶飞行器设计、研发制造商，我们无疑面对着全世界的瞩目和期待，以及监管方最严苛的标准和考验。这是一个创新行业的先行者必将承受的压力，也是我们不断挑战和突破自己的动力。经过我们亿航适航团队与中国民航局审查组长达十个多月的深入沟通与合作，今年二月，中国民航局正式通过并颁布了亿航216S型无人驾驶航空器系统专用条件，为我们的适航审定工作奠定了重要基石，也成为了这个创新行业发展历程中的一个开创性里程碑。和其他有飞行员驾驶的航空器型号审定不同，亿航的产品在无人驾驶技术和运行模式的先进性、创新性，在数据链路、复杂系统和软件的符合性验证方面带来更多的新的挑战。我们的技术团队和适航团队一步步攻坚克难，在持续探索并完善符合性方法。我们编制的专项审定计划即将通过中国民航局的评审和批准，就审定项目节点、审定基础、符合性方法、验证试验计划、证后管理等内容达成共识，推进适航审定工作尽快顺利完成。在生产制造方面，我们在AS9100D的国际航空航天质量管理体系认证的基础上，正按照中国民航局的生产批准和监督程序，以型号认证和生产认证为导向，进一步精进完善我们的质量、工艺、生产和供应链体系，同时完成了用于制造符合性审定的验证机。我们正在克服国内疫情等诸多因素的影响，与中国民航局紧密合作，尽快完成取证工作。在人才引进方面，我们很高兴于今年二月份迎来了我们的首席运营官方鑫先生的加入，负责管理公司的日常经营和业务发展。方总在企业管理、科技产品解决方案及销售、旅游项目开发和运营方面有二十多年的丰富经验，将给亿航带来全新的原动力。近期，我们还迎来了一位新任的生产副总裁张江科先生的加入，将会带领团队把亿航的生产制造体系提升到一个更加成熟完善的行业领先水平。张总拥有二十多年的飞机制造经验，是中国首架CCAR-23部全复合材料通用飞机制造的技术负责人和CCAR-25部大型水陆两栖飞机副总工程师，曾任职于GE通用电气 (GE)全资子公司Unison Engine Components企业。我们会在人才和研发方面不断开拓，保持创新，永不放弃。第三，在市场开拓方面，我们继续深耕中国本土市场的同时，在海外多个亚洲国家，包括日本、马来西亚、印度尼西亚、泰国，累计收获了210架载人级自动驾驶飞行器的批量新订单。这表明客户对我们的产品需求强劲，并计划共同把亿航自动驾驶飞行器引入当地市场，合作开发空中交通业务。我们计划这些订单将在取得适航证后陆续交付，为我们接下来的业绩增长奠定坚实的基础。下面请我们的首席战略官徐总为大家详细汇报。谢谢大家。
Below is the translation of Mr. Hu's remarks. Thank you, Julia. Hello, everyone. Thank you for joining our earnings call today. Since the first quarter of 2022, we have been facing and mitigating external impact and uncertainties resulting from macroeconomics, geopolitics, and ongoing pandemic and its associated prevention and control measures. However, the more adversities, the more important to maintain stable development. As such, we are more focusing on strengthening ourselves, and have ushered in a good start in this year, which is mainly reflected in airworthiness certification, the key talent recruitment, and market expansion. First of all, let's dive into our airworthiness certification process, which remains our first and foremost priority of the company's development at current stage.
As the world's leading designer, developer, and manufacturer of a passenger-grade autonomous aerial vehicles, which is dedicated to achieve commercialization, we are undoubtedly receiving attention and facing expectations across the globe, as well as the most stringent standards and tests from regulators. This is the pressure a pioneer of an innovative industry will inevitably bear, but it's also motivation for us to consistently challenge ourselves and make breakthroughs. After more than 10 months of in-depth communication and cooperation between our airworthiness team and the type certification team of the CAAC, the CAAC formally adopted and issued the special conditions for the EH 216-S AAV type certification in this February, which laid a critical cornerstone for airworthiness certification, and is also a groundbreaking milestone in the development of this innovative industry.
Distinct from the type certifications of other aircraft operated by pilots, the advanced and innovative nature of EHang's product in the aspect of unmanned autonomous technology and operation mode leads to newer challenges in compliance and verification for data links, complex system, and software. However, our technical team and airworthiness team are tackling challenges step by step, and are continuing to explore and refine the means of compliance. Our project-specific certification plan is about to get the CAAC's approval, with which we will reach consensus with CAAC over expected timelines of the certification project, the certification basis, the means of compliance, verification plans, after certification management, et cetera. In order to accelerate the airworthiness certification.
In terms of production, on the basis of AS9100D, an international aerospace and aviation quality management system certification that we have obtained, we are also following the CAAC's production approval and supervision procedures with an orientation to secure the type certificate and a production certificate to further refine and improve our quality, manufacturing technique, production, and supply chain systems. Meanwhile, we have produced the validation used AAVs for manufacturing conformity inspection. We are trying to overcome the impact of many factors, such as the domestic epidemic, and work closely with the CAAC to complete the certification work as soon as possible. Next, let's move on talent acquisition. We are very pleased to have our Chief Operating Officer, Mr. Fang Xin, join us in February. He's responsible for managing the company's daily operations and business development. Mr.
Fang has more than 20 years of experience in corporate management, technology product solution sales, as well as tourism project development and operation, which will bring new driving forces for the company. Recently, we also welcomed Mr. Zhang Jianke, our newly appointed Vice President of Production, on board. He will lead our production team in elevating EHang's manufacturing system to more mature, optimized, and industry-leading levels. Mr. Zhang has more than 20 years of experience in aircraft manufacturing technology. Notably, he was the manufacturing technology head of China's first fully composite general purpose aircraft compliant with CCAR-23, and also the Deputy Chief Engineer of the largest amphibious airplane compliant with the CCAR 25. He had also worked for Unison Engine Components, a wholly owned subsidiary of General Electric. We will continue to move forward talent recruitment and R&D, while always keeping steadfast in continuous innovations. On the market expansion front.
In addition to continuing our development in China, we have also received pre-orders for a total of 210 units of passenger grade AAVs so far this year in multiple Asian countries, including Japan, Malaysia, Indonesia, and Thailand. This is a testament to the strong customer demand and a global prospect for our products, which is further illustrated by plans for introducing EHang AAVs into various local markets and a core developing regional air mobility business with us. We expect these pre-orders will be delivered gradually upon obtaining the airworthiness certificate and lay a solid foundation for our future growth. I will now turn the call over to Chief Strategy Officer Edward Xu to bring more detailed performance. Thank you.
Thank you, Mr. Hu. Hello, everyone. In first quarter of the year, our company continued its focus on the strategic goal of UAM platform operator, steadily upgrading towards a sales plus operation integrated business model. EHang's unique AAV technology and a smart command and control system will enable the underlying technologies for the future air traffic management. The AAV distributed operation and management. The digital operating and service systems, as well as the ecosystem expansion. These are also EHang's differentiated advantages and the fundamental driving force empowering our commitment to becoming a leading UAM platform operator.
Based upon our positioning of the AAV operational platform, we have been actively cooperating with upstream and downstream industry stakeholders such as the government, regulators, professional scientific research institutions, aviation components suppliers, telecommunication service providers, general aviation operators, the airport and road infrastructure operators, real estate enterprises, large commercial groups, as well as our clients and partners in the fields of tourism, transportation, logistics, emergency and rescue, medical and firefighting to jointly explore and develop a UAM ecosystem tailored for AAVs, thus leading and promoting the development of a safe, efficient and sustainable smart air mobility industry. For instance, our recent customers and partners in other Asian countries all have extensive resources and experiences in their local markets, such as the C.P. Group, a large multinational conglomerate in Thailand. These strong partners will stimulate the expansion and growth for the company's overseas business development at both sales and operations levels.
Besides China, Asia is one of the significant strategic markets for us. Now, let me turn the call to our COO, Mr. Fang, to address our progress on the business front. Mr. Fang, please go ahead. Thank you.
谢谢徐总。大家好，我加入一航已经三个多月，在这三个多月中，围绕公司空中交通平台运营商的核心战略目标以及销售加运营整合的商业模式，公司的各项工作有序地进行中。今年一季度以来，由于中国疫情再次爆发以及更加严格的出行限制，我们与大多中国企业一样面临着一些压力、挑战和不确定性。例如我们与中国民航局 TC 审查组的线下沟通会议和现场审查工作的进度被迫放缓，旅游行业相关的业务开展受到影响，部分旅游场景的运营试飞受到限制等等。尽管如此，我们相信这些外部的影响只是短期的。公司对长期的发展依旧抱有信心。基于我们内在的核心技术优势，明确的发展战略，多样化的产品线和解决方案，领先的市场认证进程，综合的业务布局和日益增长的市场需求和预订单储备，稳固的生产制造基础。刚才也提到，今年一季度以来，我们在亚洲其他国家的市场开拓初见成效，在今年一月份获得了来自日本领先的空中交通数据平台公司直升机服务平台提供商 AirX 的五十架一航 216 系列预订单。三月份，我们与马来西亚领先的航空企业 AEROTREE 建立战略合作，收获五十架一航 216 系列和十架 VT-30 的预订单。四月初，我们获得了来自印度尼西亚航空企业 Prestige Aviation 的一百架一航 216 预订单，并在印尼首都雅加达完成了飞行演示。上周，我们刚刚与泰国大型跨国集团正大集团宣布达成战略合作。双方计划在泰国建立合资公司，把一航 AAV 引入泰国市场，并在当地展开全面合作。与此同时，我们在持续推进空中交通百线计划的试运行，以粤港澳大湾区为重点，我们与客户、通航公司、地产企业等各界合作伙伴共同合作，已在广州、贺州、深圳、肇庆、三亚、珠海、阳江等启动了九个 AAV 常态化运营试点，并基于实际飞行环境和应用场景，迄今已完成累计四千八百多次运行试飞。商业化运营航线正在持续的试飞开发、数据累积与验证的过程中，以充分的试飞累积来确保飞行安全的充分验证和常态保持。不仅如此，我们正在加快推进数字低空生态圈的布局，从一航自身软件平台优势出发，向外延伸，通过空中游览、空中出行、空中表演等多个低空飞行服务，配合数字空域管理，打造智慧空中城市的多角度运营场景。另外，网约平台系统及运营系统的开发和搭建正在进行中。网约飞行连同航班调度、飞机调度、任务管理等功能在内的核心系统架构及数据库搭建已初见雏形。第一期的航班计划及运行调度管理系统已完成开发，进入测试当中，预计今年三季度投入运营点的日常工作使用。各项 AAV 的运营准备正在提前进行，以便取得相关监管认证后，公司可以快速启动商业化运营服务。我们期望在一航和所有关注城市空中交通行业的政府、监管方、客户和合作伙伴的共同推动下，能够早日实现让每一个人都能享受到安全、自动、环保的空中交通。谢谢大家。接下来再由我们的首席财务官刘总为大家汇报公司的财务情况。谢谢。
Below is the translation of Mr. Fang's remarks. Thank you, Edward. Hello, everyone. It has been more than three months since I joined EHang. During the period, the company has been operating well and smoothly, with a focus on its strategic goal of UAM platform operator, and the sales plus operation integrated business model. Since the first quarter of this year, like most Chinese companies, we have been facing pressures, challenges, and uncertainties due to the resurgence of the COVID-19 in China, and the stricter travel restrictions. For example, our original schedule of offline communication and on-site inspection meetings with the CAAC TC team had to be delayed, and the tourism-related business also saw adverse impact as our operational trial flights were restricted at certain tourism sites. Nevertheless, we believe these external impacts are only temporary.
We still remain confident in our long-term development and growth with our inherent core technology advantages, clear strategy, diversified product lines and solutions, ongoing process for our industry-leading airworthiness certification, and comprehensive layout, ever-growing market demand and pre-orders, and our firm manufacturing foundation. As noted earlier, since the first quarter of this year, our market expansion in other Asian countries has achieved a positive progress initially. In January this year, we received a pre-order for 50 units of EH 216 series in Japan from AirX, a leading Japanese air mobility digital platform company, and a private helicopter charter service provider. In March, we partnered with AEROTREE, a leading Malaysian aviation company, and received a pre-order for 50 units of EH 216 series, and 10 units of VT-30.
In April, we received a pre-order for 100 units of EH 216 from an Indonesian aviation company, Prestige Aviation, and successfully performed a flight demonstration in Jakarta, the capital of Indonesia. Last week, we formed a strategic partnership with C.P. Group, one of the largest conglomerates in Thailand. Both parties plan to establish a joint venture in Thailand to introduce EHang AAVs to the Thai market with comprehensive cooperation. Meanwhile, we continued to advance trial operations under the 100 Air Mobility Routes Initiative. With a focus on the Guangdong-Hong Kong-Macao Greater Bay Area, we have worked with our customers and partners, like the general aviation companies and the real estate companies, to launch nine AAV operation spots in Guangzhou, Hezhou, Shenzhen, Zhaoqing, Sanya, Zhuhai, Yangjiang, and other cities.
To date, more than 4,800 operational trial flights has been carried out in practical flight environments and application scenarios. Moreover, our commercial flight routes are in the process of continuous development, test flight, data accumulation and verification in order to ensure adequate verification of flight safety and consistent quality with sufficient flight record. Not only that, we are accelerating layout of the digital low-altitude ecosystem. Derived from our inherent software platform advantages, we are planning on low-altitude flight services and digital airspace management to create various aerial operation scenarios for smart cities, such as the aerial sightseeing, aerial transportation, aerial media, et cetera. In addition, we are actively developing and building our online booking platform system, namely our operating system.
The core system architecture and the database construction of online flight bookings, together with flight scheduling, aircraft dispatching, task management, and other functions, have already began to take shape. The initial flight scheduling and operating system has been developed and is running tests. It is expected to put into daily operations in the third quarter of this year. Overall, all AAV-related operations are being prepared in advance to ensure that the company can quickly start commercial operational services after obtaining relevant regulatory certifications. With the joint efforts of EHang and all parties in the urban air mobility industry, including the governments, regulators, customers, and partners, we expect to achieve our mission in the near future to make everyone enjoy a safe, autonomous, and eco-friendly air mobility experience. I will now turn the call over to our CFO, Richard Liu, for financial results. Richard, please go ahead. Thank you.
Thank you, Xin, and hello, everyone. Before I go into details, please know that all numbers presented are in RMB and are for the first quarter of 2022, unless stated otherwise. All percentage changes are on a quarter-over-quarter basis unless otherwise specified. Detailed analysis are contained in our earnings press release, which is available on our IR website. I will now highlight some of the key points here. In the first quarter of 2022, we continued to execute our strategies towards an urban air mobility platform operator. Additionally, we maintain our focus on the EH216 type certification process with the CAAC and further developing the 100 Air Mobility Routes Initiative, with increasing operational trial flights in selected locations in China. With these concerted efforts, we remain confident and positive on the long-term prospects of our business growth.
As a result, in Q1 of 2022, total revenues were RMB 5.8 million, compared with RMB 8.7 million in Q4 of 2021. The EH216 series of AAV deliveries in Q1 were three units, compared with four units in Q4. However, it's worth noting that recently we have seen increasing interest from customers in China and overseas. For example, we have secured AAV pre-orders of up to 210 units in Japan, Malaysia, and Indonesia since the beginning of the year, which demonstrate a strong demand and great potential for our products internationally. These pre-orders are expected to be delivered in the coming years. Our overall growth margin has continued to maintain at a high level as compared to those of other companies with new energy mobility products such as electric cars.
Our growth margin was 62.5% in Q1, up 2.4 percentage points from 60.1% in Q4 last year, mainly due to changes in revenue mix. In Q1, our adjusted operating expenses, which are operating expenses, excluding share-based compensation expenses, decreased by 49.1% quarter-over-quarter to CNY 46.1 million, from CNY 90.4 million in Q4 last year. There were lesser provisions for accounts receivable related to the impacts of COVID-19 pandemic. Additionally, expenditure on R&D materials were lower than Q4 last year, as they usually vary following development progress for different projects between periods. With that, in Q1, our adjusted operating loss was CNY 41.7 million, and adjusted net loss was CNY 40.9 million, each representing an improvement of roughly 50% from CNY 83.8 million and CNY 82.2 million in Q4 last year, respectively.
With regard to our balance sheet, as of the end of Q1, we had RMB 236.9 million of cash equivalents, restricted cash, and short-term investments. We will continue our efforts to effectively manage our operating expenditures. That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead.
Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. At this time, we'll pause momentarily to assemble our roster. Our first question comes from Tim Hsiao from Morgan Stanley. Please go ahead.
Hi, everyone. Thanks for taking my questions. I've got a few quick questions. The first one, I think that Mr. Fang, during the presentation briefly touched on, your collaboration with the C.P. Group, announced last week. Just wondering, could you please share a little bit more about the details of business opportunities we are looking for and, how the business model will work and, what kind of contribution we should expect in the upcoming quarters? Second question is about production disruption, because I think a lot of supply chains are basically suffering from recent COVID lockdown. Have we encountered any hiccups in terms of production, part sourcing, or type certificate obtainment and whole operation related stuff?
Do we see any risk of further delays in terms of the certificate receiving? That's my second questions. My last question is about our new models. Can you please share a little bit more about the operational updates on VT-30? When will we plan to get the certificate on this new model? Those are my three questions. Thank you.
[Foreign Language]
Hi, team. Thank you for the questions. This is Fang Xin. I will take your questions.
[Foreign Language]
Last week, we are very pleased to announce the strategic partnership with Thailand's C.P. Group, and we plan to establish a joint venture to launch our partnership. It reflects both companies' high recognition of each other and the willingness for a deep cooperation. This will lay a good foundation for AAV sales and urban air mobility business in Thailand in the future. We look forward to initiating our collaboration. As we know, the C.P. Group is not only one of the largest conglomerates in Thailand, but it also has investments in 21 countries and economies.
The group is comprised of eight business lines and 14 business groups covering various sectors of agricultural industry and food, retail and distribution, media and telecommunications, e-commerce and digital, property development, automotive and industrial products and pharmaceuticals, etc. We see a lot of potential use cases for our AAVs in the C.P. Group business fields, such as the tourism, logistics, healthcare, the disaster relief, agriculture, and so on. Both of us plan to leverage our own expertise and resources in a long-term comprehensive collaboration on the AAV product sales and marketing, regulatory compliance, the business development and the infrastructure deployment, talent cultivation, and so on, for our future UAM operations, and introduce the safe, autonomous and sustainable air mobility technology and solutions to Thailand and more markets.
[Foreign Language]
That is my answer to team's first question. Thank you.
[Foreign Language]
In light of the recent COVID epidemic, for your second question, as mentioned before, since the first quarter of this year, like most Chinese companies, we have been facing pressures, challenges, and uncertainties due to the resurgence of the COVID-19 pandemic in China and the stricter travel restrictions. In respect of our production, we didn't see any significant impact so far from the epidemic on our supply chain, because our suppliers are mostly in the Guangdong area in South China. Due to the changes of the global landscape, we saw some price increase of some raw materials. We did some preparation with some inventory of the key components and materials beforehand.
在TC auditing方面，项目进度受到一定的影响，被迫放缓。因为线下沟通会议和现场审查工作无法正常开展。但我们正在克服国内疫情这些诸多因素的影响，与中国民航局紧密沟通合作，争取尽快完成取证工作。
In respect of the type certification, the process was affected, and had been slowed down as our, offline communication and on-site, inspection meetings with the CAAC TC team, could not be normally conducted. Having said that, we have been trying our best to minimize the impact of many factors, including the recent domestic epidemic, and working closely with the CAAC to complete the certification work as soon as possible.
在销售交付和运营方面，基于旅游业相关的业务发展受到非常大的影响，以及在旅游场所的适飞运行受到一些限制。
From the perspective of sales delivery and operation, our tourism related business was also impacted as our operational trial flights were restricted at some tourism sites.
关于今年的营收，我们面临了诸多的挑战和不确定性。我们在密切关注着市场和适航审定情况的进度，并相应调整战略。但我们对未来的长期发展前景保持信心。
With regard to the revenue of this year, as we are facing many challenges and uncertainties, we are closely watching the development of the market conditions and also the certification progress. We are adjusting our strategies to be adaptable accordingly. We remain confident in the long-term outlook going forward.
以上是对于第二个问题的回答。谢谢。
That is my answer to your second question. Thank you.
关于您的第三个问题，现阶段公司适航认证工作呢，主要针对EH216-S产品。
For your third question, at current stage, our airworthiness certification work is focusing on the EH 216- S product.
对于VT-30，我们秉承安全第一的原则，不急躁，不冒进。在这个产品的设计和研发测试过程中，我们就开始建立了这种飞行器的适航体系。目前我们在增加更大量的飞行器部件级的测试，在确保飞机的全面安全性的基础上进行更大量的飞行测试。
For the product of our VT-30, we have maintained the principle of safety first, and there is no need to rush. In the process of designing R&D and testing for this product, we have been establishing this airworthiness system. We started with a lot of aircraft component test first to ensure the overall safety of the aircraft, and then carried out a larger number of flight tests.
以上是对于第三个问题的回答。谢谢。
That is my answer to your third question. Thank you.
谢谢方总。
The next question comes from Di Wu from GF Securities. Please go ahead.
Hi. Thank you for taking my questions. I have two questions as well. My first question is regarding to employees in the research and product development department. I see that we have around, I'm guessing, 50% increase in personnel and mostly in the R&D side. Is it possible to give us a rough distribution between the 189 R&D personnel increase? Like, for example, certain percentage is working on AAV and its new model and so on. Given the big increase in R&D employees, what areas are those newly recruited employees mostly working on? For my second question, is about the strategic partnership between EHang and C.P. Group. We see that EHang is actively forming key partnership with companies from each countries of Southeast Asia.
Are we going to see similar strategies in rest of the global region? Most importantly, will we see similar strategic partnership in China as well? Thank you so much.
Thank you, Di, for your questions. This is Richard Liu. Let me take your first question and
Okay.
Edward can take your second question regarding the market strategy. I understand the number of employees you're talking about is from our 20-F of 2021. The size of our R&D team has been steadily increasing as we continue to enhance our R&D capabilities, which is our core competitive advantage. Basically, the distribution of our R&D team follows our R&D strategy, which is to establish an integrated technology platform that is across different technological functional areas and lays a foundation to create synergy for developing different products.
Overall, our R&D team is roughly 40% in hardware development and 30% in software development, with the rest in other major areas such as certification and testing, etc. The core team of our R&D team has been stable and with the company since early days. They have accumulated abundant and leading experience and insights in AAV and eVTOL technologies. The big increase in 2021 you mentioned was evenly distributed with an emphasis on the certification and testing areas as the year 2021 was an important year for our certification process. Hope this answers your question. Thank you.
Thank you.
Hello. Hello, this is Edward Xu, Chief Strategy Officer here. I'd like to answer your second question, right? Regarding our global, you know, strategy, forming partnerships. Basically, we, as we mentioned earlier, right, we've positioned ourselves as a UAM platform operator, and we understand that the UAM industry is a whole ecosystem. We are trying our efforts to build this whole ecosystem, which means that it consists of not only the regulators but also different partners, in which we are cooperating with real estate operators, amusement park operators and conventional aviation operators, et cetera.
As you can see, this time we just form a very good partnership with the C.P. Group in Thailand, which is a very you know honorable with high reputation and strong capabilities in Thailand. Similarly, we are also seeking different partnerships with different countries and market. But as you know that our focus is in China first. Which means that in China, we actually had built extensive partnership with quite a number of you know reputable companies, which includes you know the Greenland Hong Kong Holdings Limited and Shenzhen Expressway and Guangzhou Development District Communications Investment Group, et cetera.
We have quite a number of solid partners in China. In overseas markets, as we mentioned earlier, the markets we focus on Asia, including Japan, Korea and the Southeast Asia countries, such as Thailand, Malaysia and Indonesia, et cetera. We actually see very good interest from those markets. Furthermore, we are also working with some European and U.S. market partners. Which means that you can see, you know, we had a very good relationship with these partners. You know, hopefully you are going to see more partnership in the future. Thank you.
Thank you. Thank you so much.
There are no further questions at this time. I'll now hand the call back to Miss Julia Chan for closing remarks.
Oh, thank you. Operator, this is Richard Liu. Thank you all for participating on today's call and for all your support. We appreciate your interest and look forward to reporting to you again next quarter on our progress. Thank you.