F-1/A: WeRide Inc. Files for IPO, Aiming to Transform Urban Mobility with Autonomous Driving Technology

WeRide Inc., a Cayman Islands-based autonomous driving technology company, has filed an amendment to its F-1 registration statement for an initial public offering (IPO) on the Nasdaq, seeking to advance its autonomous driving solutions globally.

Summary

• WeRide Inc., a Cayman Islands holding company, is preparing for an IPO of its American Depositary Shares (ADSs) on the Nasdaq Stock Market under the symbol WRD.
• The company is offering 6,452,000 ADSs, with each ADS representing three Class A ordinary shares.
• The anticipated initial public offering price is between US$15.50 and US$18.50 per ADS.
• Concurrently with the IPO, certain investors have committed to purchase US$320.5 million in Class A ordinary shares through private placements.
• Robert Bosch GmbH has expressed interest in purchasing up to US$100 million of the ADSs in the offering.
• WeRide operates primarily through its subsidiaries in mainland China and faces legal and operational risks associated with that region.
• The company's revenue was RMB401.8 million (US$55.3 million) in 2023, a decrease from RMB527.5 million in 2022.
• WeRide's loss for the year was RMB1,949.1 million (US$268.2 million) in 2023.
• The company plans to use the IPO proceeds for research and development, commercialization, capital expenditures, and general corporate purposes.
• WeRide's ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect or investigate completely auditors located in China.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While WeRide highlights its technological achievements and market leadership, the financial results indicate a decrease in revenue and an increase in losses. The potential risks associated with operating in China and regulatory uncertainties also contribute to a neutral to slightly negative outlook.

Positives

• WeRide is the most commercially successful L4 autonomous driving company globally as measured by commercialization revenue in 2021, 2022 and 2023.
• The company operates in 30 cities across seven countries.
• WeRide has a strategic partnership with Bosch for ADAS solutions.
• The company has a strong team of 2,227 employees, approximately 91% of whom are R&D staff.
• WeRide has intent orders for approximately 2,000 units of robobuses and over 10,000 units of robovans.

Negatives

• WeRide's revenue decreased from RMB527.5 million in 2022 to RMB401.8 million (US$55.3 million) in 2023.
• The company's loss for the year was RMB1,949.1 million (US$268.2 million) in 2023.
• WeRide faces legal and operational risks associated with operating in mainland China.
• The company's ADSs may be prohibited from trading in the United States under the Holding Foreign Companies Accountable Act (HFCAA) if the PCAOB is unable to inspect or investigate completely auditors located in China.

Risks

• WeRide has a limited operating history and financial track record.
• Autonomous driving technology is an emerging technology with significant development and commercialization challenges.
• The company's business model has yet to be fully tested.
• WeRide's autonomous driving products and services may not gain public acceptance.
• The company's operations are subject to extensive and evolving governmental regulations.
• WeRide's business generates and processes a large amount of data, requiring compliance with privacy and cybersecurity laws.
• The company's autonomous driving technology could have undetected defects or contain serious errors.
• WeRide is subject to export control, sanctions, trade policies and similar laws and regulations.
• The current tensions in international trade and rising political tensions, particularly between the U.S. and China, may adversely impact our business, financial condition, and results of operations.
• The PCAOB had historically been unable to inspect our auditor in relation to their audit work.
• Changes in Chinas economic, political or social conditions or government policies could have a material adverse effect on our business and operations.
• 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.
• We may be required to complete filing procedures with the China Securities Regulatory Commission in connection with our future offerings. We cannot predict whether we will be able to complete such filing on a timely manner, or at all.

Future Outlook

WeRide aims to commence commercial production of its robotaxis and achieve readiness for large-scale commercialization in 2024 and 2025, respectively. The company expects to lower its hardware and operating costs and achieve operational efficiency as it increases the volume of its autonomous driving vehicles and expands the scale of its autonomous driving services.

Management Comments

• We believe WeRides autonomous driving technology is among the most advanced and commercially proven in the world, designed to cater to a broad spectrum of scenarios from urban environments to highways.
• We endeavor to unlock the true power of autonomous driving by building our WeRide One platform, our foundation model and business backbone empowered by advanced smart models and our unparalleled experience from open-road operations.

Industry Context

The autonomous driving market is expected to see tremendous growth, with the global market 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 operates one of the worlds largest autonomous driving fleets.
• WeRide is the L4 autonomous driving company with operations in the most countries.
• WeRide has the smallest net loss as compared with publicly-listed L4 companies globally in 2021, 2022 and 2023.
• 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 has engaged in related party transactions with Yutong Bus Co., Ltd., Alliance Automotive R&D (Shanghai) Co., Ltd., and Guangzhou Yuji Technology Co., Ltd.

Stakeholder Impact

• Shareholders will be subject to dilution.
• Employees may benefit from the share incentive plan.
• Customers may benefit from the continued development of autonomous driving technology.
• Suppliers may benefit from increased demand for components.
• Creditors may be impacted by the company's financial performance.

Next Steps

• The offering is contingent upon approval for Nasdaq listing.
• The underwriters expect to deliver the ADSs against payment in U.S. dollars in New York, New York on or about , 2024.
• WeRide 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, IPO, WeRide, robotaxi, robobus, ADAS, China, commercialization, technology, vehicles