As a result, we commenced the delivery of the certified EH216-S aircraft. Following the TC and AC, we are delighted to see a substantial surge in market demands for our EH216-S pilotless passenger-carrying eVTOL, resulting in a significant sales volume growth in the fourth quarter, with a total of 23 units of EH216-S series product delivered. Notably, this represents the highest number of deliveries in a single quarter in the past three years. The revenue of the fourth quarter surpassed RMB56 million, marking a year-over-year growth rate of over three times and nearly doubling quarter-over-quarter. Moreover, we generated positive operating cash flow in the fourth quarter as demand for our product is strong and our company's operations continue to steadily improve.

Our strong growth was attributed to the proactive policies and supports from local Chinese municipal governments that are actively fostering the high-quality development of the low-altitude economy. Since the Central Economic Work Conference chaired by President Xi in December last year, when the low-altitude economy was elevated to a strategic emerging industry, nearly 20 provinces in China, have incorporated the low-altitude economy, into their 2024 government work reports. Furthermore, during the two sessions recently held in China, the central government work report included the low-altitude economy for the first time. This recognition, underscores the expectation that the low-altitude economy, will serve as a new growth engine for China, and a globally competitive emerging industry, and a vital sector for nurturing and advancing, new high-quality productive forces.

According to research institution estimate, the market size for China's low-altitude economy surpassed RMB500 billion in 2023, and expected to reach RMB2 trillion, by 2030. This represents a substantial emerging market, and the penniless passenger-carrying aerial vehicles like the EH216, are poised to play a leading role, in propelling the industry forward. Capitalizing our first-mover advantage, in obtaining airworthiness certification and benefiting from favorable policies, we have witnessed a surge in market demand, and enthusiasm for our EH216 series products. In the first quarter, we received hundreds of pre-orders from domestic and overseas customers in China's Guangzhou, Hefei, Wuhan, and the UAE, and other regions. Furthermore, we have recently formed a partnership, with the government of Wuxi City in Jiangsu Province, resulting in pre-orders for at least 100 units of EH216-S.

Through these collaborations, we have actively planned to create low-altitude economy demonstration applications in the area. The strong market demands from our customers, give us great confidence in our future growth prospects. We have also announced, the pricing of the EH216-S pilotless passenger-carrying aircraft system in both the domestic Chinese market, and overseas markets. The pricing has been set at RMB2.39 million for the Chinese market, and US$410,000 for international markets. We believe these prices are highly competitive, when compared to other in-vitro products worldwide. Moreover, this pricing strategy aligns, with the market demands and contributes to the development of the low-altitude economy. In preparation for the next stage of mass production, our efforts to obtain the production certificate, which is TC, is almost completed.

Currently, the CAAC review team, has conducted all the on-site inspections, and all the required quality system documents, have been submitted to the CAAC for the final process. The TC is expected, to be obtained in the near future, offering a robust assurance and a support, for the production quality of the newly produced EH216 under the supervision system of the CAAC. During the first quarter, we developed several low-altitude economy demonstration sites in Shenzhen, Guangzhou, and the Hubei Province, and our EH216-S completed the first commercial flight demonstrations at the UAM Operations Center in Shenzhen, Hubei, Jiulong Lake Park in Guangzhou, Huangpu District, and Luogang Central Park in Hefei. The Hefei Municipal Government, has reached a strategic cooperation agreement with EHang in the low-altitude economy, planning to extend support to EHang in various forms with a target amount of US$100 million, while the Guangzhou Municipal Government, announced a 10 major supportive policies, to stimulate the low-altitude economy.

Currently, we are actively conducting a series of crucial preparations for commercial operations, including operator training, and the development of operation systems. By leveraging our distinctive and pioneering expertise in pilotless eVTOL operations, EHang continues to strengthen collaborations with the CAAC, to establish the world's first regulatory system standards for eVTOL commercial operations, by the second quarter of this year. These efforts, will set reliable regulations, and a benchmarks for the safety operations in e eVTOL industry. In 2024, we will coordinate with multiple governments, to complete the construction of infrastructure, such as the eVTOL vertiports, and shape the benchmark cities that exemplify the potential of the low-altitude economy and launch commercial operation ceremonies in key use cases, such as the aero-tourism and urban air taxes.

This will allow distinct from science fiction movies to officially step into the public eyes. In terms of the industry chain, we have been actively cooperating with outstanding suppliers and partners striving to expand opportunities within the low altitude economy sector. In January, we entered into a strategic partnership with Bao'an, a leading global provider of the new energy solutions, to jointly research and develop battery cells, battery packs, storage system and charging infrastructure especially designed for pilotless aerial vehicles. In February this year, we partnered with Guangzhou Automobile Group, GAC in short, which will capitalize on GAC's extensive experience and well-established industrial chain and intelligent manufacturing to accelerate the smart production, application and market expansion of our pilotless airway vehicles.

Regarding product development, we will continue to enhance our EH216-S performance to unlock its full potential for various applications. To this end, last year, we strategically invested in Inx, a solid state lithium battery company based in Shenzhen, to strengthen the supply chain for solid state lithium batteries in eVTOLs. Lithium metal solid batteries offers significant advantage over the liquid batteries in terms of the safety, energy density, thermal stability, cruising range, charging and discharging performance, et cetera. As a result, we believe that the flat range and many other performance of our EH216-S product will be greatly enhanced in the future. Furthermore, this year, we will devote more R&D efforts towards testing and certification of our -- , another pilotless passenger carrying leased and cruise eVTOL model.

This is a long-range aircraft designed for intercity transportation. We will conduct a rigorous testing on older system of the -- and full transition flights in the near term. Based on the test result, we will finally analyze and actively iterate improvements to ensure that all the performance indicators meet design requirements. Myself has experienced a flight with -- in person and it feels amazing. Meanwhile, we also are doing preparations for the PC application for VT-30. And just a few days ago, we commenced another tour of a passenger cabin flight across several cities in Japan. I'd like to extend my thanks to our COO, Mr. Xin Fang, who is currently at our Japan events and thus unable to attend this earnings call. Next I will turn the call over to our CFO, Conor.

Conor Yang: Thank you, Mr. Hu. Hello, everyone. This is Conor. Before I go into details, please note that all numbers presented are in RMB and are for the fourth quarter and fiscal year of 2023 unless stated otherwise. Detailed analysis are contained in our earnings press release, which is available on our IR website. I will now highlight upon some of the key points here. Having obtained the TC and AC for our proprietary EH216-S, our total revenues reached RMB56.6 million in Q4, a significant increase of 260.9% from RMB15.7 million in the same period last year and a remarkable increase of 97.8% from RMB28.6 million in Q3. The increase was primarily attributed to the increase in our sales volume of EH216 Series products. We delivered 23 units of EH216, up 283% year-over-year and 77% quarter-over-quarter.

For the fiscal year 2023, total revenue were RMB117.4 million, a significant increase of 165% from RMB44.3 million in 2022. The EJ216 series of AAV deliveries in 2023 were 52 units, up 148% from 21 units in 2022. Gross margin remained stable at a high level of 54.7% in Q4, flat from 4.6% in Q3. Gross margin was 64.1% in 2023 despite a slight decrease of 1.8 percentage point from 65.9% in 2022 primarily due to changes in revenue mix. This represents the continued high gross margin level as a result of our competitive strength and first-mover advantage in the global UAM and digital industries. In Q4 our adjusted operating expenses, which our operating expenses excluding share-based compensation expenses, were RMB64.2 million, down 12.4% from RMB73.2 million in the same period last year and up 18.8% from RMB54 million in Q3.

The quarter-over-quarter increase was primarily driven by the expansion of sales channels and intensified marketing efforts in enhancing brand awareness. On an annual basis, the adjusted operating expenses were RMB226.3 million in 2023, down 6.6% from RMB242.4 million in 2022. As a result, our adjusted operating loss in Q4 was RMB24.9 million a 59.4% improvement from RMB61.3 million in the same period last year and a 27.3% improvement from RMB34.2 million in Q3. For the fiscal year, adjusted operating loss was RMB144.8 million, a 30.1% improvement from RMB207.1 million in 2022. Adjusted net loss in Q4 was RMB22.1 million, a 62.8% improvement from RMB59.4 million in the same period last year and a 29.4% improvement from RMB31.3 million in Q3.

For the fiscal year, adjusted net loss was RMB138.8 million in 2023, a 32.7% improvement from RMB206.2 million in 2022. Thanks to our stringent approach to cash and liquidity management, I would like to highlight that we achieved positive cash flow from operations in Q4 further strengthening our balance sheet. As of the end of Q4, we had RMB334.1 million of cash, cash equivalents, short-term deposits, short-term investment and restricted short-term deposit balances. We are also actively in discussion with several commercial banks regarding the expansion of credit facilities although our current cash position and expected cash flow from operations will be sufficient to fulfill our cash needs for us to reach profitability in the near future. Looking ahead, with our -- progress towards obtaining TC for mass production and deliveries, we anticipated achieving revenue of about RMB58 million in Q1 this year representing an increase of 161% year-over-year.

That concludes our prepared remarks. Let's now open the call for questions. Operator, please go ahead. Thank you.

Operator: [Operator Instructions] First question comes from the line of [Gary Tsao from TF]. Please go ahead.

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