DOMESTIC drone maker EHang Inc. is planning a U.S. initial public offering (IPO) this year, according to people with direct knowledge of the matter, with one saying it could raise between US$400 and US$500 million.

Morgan Stanley and Credit Suisse are working on the offering, the people said. Another person said the deal was unlikely to be as large as US$500 million.

Credit Suisse declined to comment. EHang and Morgan Stanley did not reply to requests for comment.

Founded in 2014 and headquartered in Guangzhou, EHang first made headlines in 2016 when it unveiled a passenger drone concept which it said would retail at up to US$300,000.

Early last year, it said it had completed tests for the vehicle which is capable of carrying one person at speeds of up to 130 kilometers per hour.

In May, EHang broke the Guinness World Record for most drones flown simultaneously in a 13-minute flight that involved 1,374 drones spread over a kilometer.

China has championed rapid development in its tech sector in a bid to build world-leading firms and reduce dependence on foreign products, including semiconductors, robots and drones.

Global spending on drones was estimated to reach US$9 billion last year and is expected to grow at a compound annual growth rate of 30 percent in the next five years, according to research firm IDC, which estimates more than half of that spending will be on drones for commercial use.

EHang specializes in aerial landscaping. In consumer drones, it is dwarfed by fellow Chinese drone maker SZ DJI Technology Co., which is the world’s largest maker of non-military drones.

(SD-Agencies)