F-1: WeRide Files for U.S. IPO, Aiming to Transform Urban Mobility with Autonomous Driving Technology

WeRide Inc., a Cayman Islands-based autonomous driving technology company, has filed for an initial public offering (IPO) in the U.S., seeking to advance its autonomous driving solutions globally.

Summary

• WeRide Inc., a leading autonomous driving technology company, has filed a Form F-1 registration statement with the SEC for an IPO of its American Depositary Shares (ADS) on the Nasdaq Stock Market under the symbol WRD.
• The company aims to transform urban living with its advanced autonomous driving technology, offering products and services from L2 to L4 levels.
• WeRide's technology is designed for a broad spectrum of scenarios, including mobility, logistics, and sanitation industries.
• Concurrently with the IPO, certain existing shareholders, including Alliance Ventures, have agreed to purchase US$ million in Class A ordinary shares in private placements.
• The company's revenue for 2023 was RMB401.8 million (US$55.3 million), a decrease from RMB527.5 million in 2022, while its loss for the year was RMB1,949.1 million (US$268.2 million).
• WeRide operates one of the world's largest autonomous driving fleets, with operations in 30 cities across seven countries.
• The company faces legal and operational risks associated with operating in mainland China, including regulatory oversight and data security concerns.
• The delisting or prohibition of trading of the ADSs may materially and adversely affect the value of your investment.

Sentiment

Score: 6

Explanation: The document presents a mixed picture. While WeRide highlights its technological achievements and market position, the financial results indicate a decrease in revenue and a significant loss. The regulatory and operational risks associated with operating in mainland China also contribute to a neutral sentiment.

Positives

• WeRide is the most commercially successful L4 autonomous driving company globally as measured by commercialization revenue in 2021, 2022 and 2023.
• WeRide operates one of the world's largest autonomous driving fleets.
• The company has a universal, scalable and smart technology platform, WeRide One.
• The company has strong partners and investors across the value chain.
• The company has a visionary management and world-class team.
• The company has a successful and sustainable business model underpinned by its unwavering commitment to globalization.

Negatives

• The company's revenue for 2023 was RMB401.8 million (US$55.3 million), reflecting a moderate reduction compared to 2022.
• The company incurred a loss for the year of RMB1,949.1 million (US$268.2 million) in 2023.
• The company has a limited operating history and financial track record.
• The company's business model has yet to be tested.
• The company's autonomous driving technology and related software and hardware could have undetected defects or contain serious errors.
• The company is subject to export control, sanctions, trade policies and similar laws and regulations.
• The PCAOB had historically been unable to inspect our auditor in relation to their audit work.
• Our ADSs may be prohibited from trading in the United States under the HFCAA in the future if the PCAOB is unable to inspect or investigate completely auditors located in China.
• The PRC government has oversight and discretion over the conduct of our business, and may intervene or influence our operations as the government deems appropriate to advance regulatory and societal goals and policy positions.

Risks

• The company faces challenges in developing and commercializing its autonomous driving technology.
• The company's autonomous driving products and services may fail to gain acceptance from the general public.
• The company's operations are subject to extensive and evolving governmental regulations.
• The company's business generates and processes a large amount of data, and it is required to comply with PRC and other applicable laws relating to privacy and cybersecurity.
• The company may be required to complete filing procedures with the China Securities Regulatory Commission in connection with our future offerings.
• The trading price of our ADSs may be volatile, which could result in substantial losses to you.
• Our dual-class share structure with different voting rights will limit your ability to influence corporate matters and could discourage others from pursuing any change of control transactions that holders of our Class A ordinary shares and ADSs may view as beneficial.
• The voting rights of holders of ADSs are limited by the terms of the deposit agreement, and you may not be able to exercise the same rights as our shareholders.
• You may face difficulties in protecting your interests, and your ability to protect your rights through U.S. courts may be limited, because we are incorporated under Cayman Islands law.

Future Outlook

The company intends to grow its business to reach large-scale commercialization, continue to strengthen its technology, expand its global presence, and exercise financial discipline and improve operational efficiency.

Industry Context

The autonomous driving market is expected to see tremendous growth, with the global market size reaching US$1,745 billion by 2030. L4 autonomous driving is expected to dominate the market, accounting for 88% of the overall autonomous driving market globally in 2030.

Comparison to Industry Standards

• WeRide is the most commercially successful L4 autonomous driving company globally as measured by commercialization revenue in 2021, 2022 and 2023.
• WeRide had the smallest net loss as compared with publicly-listed L4 companies globally in 2021, 2022 and 2023.
• WeRide is the only autonomous driving company in the world to obtain test permits for autonomous driving vehicles in four countries.
• WeRide is the only autonomous driving company to achieve mass production of an ADAS solution within 18 months into development, the quickest among peers.

Related Party Transactions

• The company derived 13.7%, 8.5%, 12.1% and 10.5% of our total revenue from related parties in 2021, 2022 and 2023 and the six months ended June 30, 2024, respectively.

Stakeholder Impact

• The company's performance and regulatory environment could impact shareholders, employees, customers, suppliers, and creditors.

Next Steps

• The company plans to use the net proceeds of this offering and the concurrent private placements as follows: (i) approximately 35% for research and development of autonomous driving technologies, products and services; (ii) approximately 30% for commercialization and operation of our autonomous driving fleets, as well as marketing activities to expand into more markets; (iii) approximately 25% to support our capital expenditures, including purchase of testing vehicles, research and development facilities and administrative expenses; and (iv) the remaining 10% for general corporate purposes.

Key Dates

Keywords

autonomous driving, WeRide, IPO, robotaxi, robobus, ADAS, China, mobility, logistics, technology