Will you take a WeRide?

WeRide Inc. Initial Public Offering (IPO) Report

Summary

WeRide Inc., a Cayman Islands holding company, is at the forefront of autonomous driving technology, addressing urban transportation needs with a global footprint. With plans to list on the NASDAQ under the symbol "WRD," WeRide is offering 6,452,000 American Depositary Shares (ADSs) in its IPO, with each ADS representing three Class A ordinary shares. The expected price range is between $15.50 and $18.50 per ADS.

1. Key Milestones and Achievements (in bullet form):

• First autonomous driving company to operate and test in 30 cities across seven countries.
• The only autonomous driving company with test permits in four countries.
• First company to offer paid L4 robotaxi services with the longest operational track record.
• Developed the first purpose-built L4 robobus for public road use and launched driverless robobus services.
• Launched the world’s first L4 robovan and robosweeper for intra-city goods delivery and road cleaning, respectively.
• Accumulated over 10,000 orders for L4 autonomous driving vehicles.
• Achieved mass production of ADAS solutions within 18 months, the fastest among its peers.

Overview of the Offering

WeRide Inc. is leveraging its leadership in autonomous driving to offer 6,452,000 ADSs in its initial public offering. The expected price range is between $15.50 and $18.50 per ADS. The company has applied to list its shares on the NASDAQ Stock Market under the symbol "WRD." WeRide's IPO coincides with concurrent private placements, where certain investors will purchase $320.5 million worth of Class A ordinary shares.

Company Background

WeRide’s mission is to transform urban living through autonomous driving technology, ranging from L2 to L4 solutions. The company has built the WeRide One platform, which supports a wide range of autonomous vehicle applications including robotaxis, robobuses, and robosweepers. As of September 2023, WeRide was recognized by Fortune magazine as a leader in innovation, joining the ranks of industry giants like Tesla and General Motors.

Financial Highlights

WeRide reported a revenue increase of 281.7% from RMB 138.2 million in 2021 to RMB 527.5 million in 2022. In 2023, the company generated RMB 401.8 million ($55.3 million) in revenue. Although revenues slightly decreased, WeRide's strong market position continues to drive growth, especially with substantial interest in its L4 autonomous driving technology and ADAS services. The company's net losses for 2023 amounted to RMB 1,949.1 million ($268.2 million), with losses in the first half of 2024 at RMB 881.7 million ($121.3 million).

Market Opportunity

WeRide is strategically positioned in the autonomous driving market, expected to grow significantly in the coming decade. The global autonomous driving market is forecasted to reach $1.7 trillion by 2030, with L4 technology anticipated to dominate the sector. WeRide’s approach to autonomous driving spans multiple industries, including logistics, mobility, and sanitation services, allowing it to capitalize on these growing opportunities.

Technology and Platform

WeRide One, the company’s autonomous driving platform, is designed to operate in complex urban environments under all weather conditions. The platform integrates smart models, robust sensor technology, and cloud-based infrastructure to support WeRide’s diverse fleet of autonomous vehicles. This universal platform allows the company to scale its technology across different vehicle types, making it adaptable for various applications.

Strategic Partnerships

WeRide has formed strategic alliances with world-class OEMs, Tier 1 suppliers, and global logistics providers. Notable partnerships include collaborations with Robert Bosch GmbH for ADAS solutions and Alliance Ventures for investment support. These alliances have accelerated the commercialization of WeRide’s technology and have solidified its position as a leader in the autonomous driving industry.

Risks and Challenges

Despite its market leadership, WeRide faces significant challenges in operating primarily within mainland China. Evolving PRC laws, including data security and regulatory oversight, pose potential risks to the company’s operations and future growth. Additionally, the potential for delisting from U.S. exchanges under the Holding Foreign Companies Accountable Act (HFCAA) is a concern, as the company’s auditor is based in China.

In Summary

WeRide Inc.’s IPO represents a major opportunity for investors to gain exposure to one of the most promising autonomous driving companies globally. With a robust technological platform, strategic partnerships, and a growing international presence, WeRide is well-positioned to continue its leadership in the rapidly expanding autonomous driving industry. However, potential investors should carefully consider the risks associated with regulatory oversight and the evolving legal landscape in China.