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) of American Depositary Shares (ADSs) on the Nasdaq Stock Market.

Summary

• WeRide Inc., a Cayman Islands holding company with primary operations in mainland China, is pursuing an IPO to list its American Depositary Shares (ADSs) on the Nasdaq Stock Market under the symbol WRD.
• The company is offering 6,452,000 ADSs, each representing three Class A ordinary shares, with an anticipated initial public offering price between US$15.50 and US$18.50 per ADS.
• Concurrently with the IPO, certain investors have agreed to purchase US$320.5 million in Class A ordinary shares through private placements.
• Robert Bosch GmbH has indicated an interest in purchasing up to US$100 million of the ADSs in the offering.
• WeRide's business model focuses on autonomous driving technology, offering products and services ranging from L2 to L4, targeting mobility, logistics, and sanitation industries.
• The company's revenue for 2023 was RMB401.8 million (US$55.3 million), a decrease from RMB527.5 million in 2022, while the net loss for 2023 was RMB1,949.1 million (US$268.2 million).
• WeRide faces legal and operational risks associated with operating in mainland China, including regulatory oversight and data security concerns.
• The company has completed filings with the China Securities Regulatory Commission (CSRC) for the IPO.
• WeRide's management team includes founder and CEO Dr. Tony Xu Han and co-founder and CTO Dr. Yan Li, who will retain significant voting power through a dual-class share structure.
• The company plans to use the net proceeds from the IPO and concurrent private placements for research and development, commercialization, capital expenditures, and general corporate purposes.

Sentiment

Score: 6

Explanation: The document presents a mixed sentiment. While it highlights WeRide's achievements and market opportunities, it also acknowledges financial losses and operational risks. The potential for growth in the autonomous driving market is positive, but the company's ability to capitalize on these opportunities is uncertain.

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 and has obtained test permits for autonomous driving vehicles in four countries.
• WeRide has a strategic partnership with Bosch and has successfully commercialized a state-of-the-art ADAS solution.
• The company has launched China's first commercial fare-based autonomous minibus service and the first autonomous Bus Rapid Transit route.
• WeRide has intent orders for approximately 2,000 units of robobuses and over 10,000 units of robovans as of the date of this prospectus.

Negatives

• The company's revenue decreased from RMB527.5 million in 2022 to RMB401.8 million (US$55.3 million) in 2023.
• The net loss for 2023 was RMB1,949.1 million (US$268.2 million).
• The company faces legal and operational risks associated with operating in mainland China, including regulatory oversight and data security concerns.

Risks

• WeRide has a limited operating history and financial track record in the emerging autonomous driving industry.
• The company faces challenges in developing and commercializing its autonomous driving technology.
• The market for autonomous driving products and services is relatively new and disruptive.
• WeRide's operations are subject to extensive and evolving governmental regulations.
• The company generates and processes a large amount of data and must comply with PRC and other applicable laws relating to privacy and cybersecurity.
• The PCAOB had historically been unable to inspect WeRide's auditor in relation to their audit work.
• WeRide's 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.
• Changes in China's economic, political, or social conditions or government policies could have a material adverse effect on WeRide's business and operations.
• The PRC government has oversight and discretion over the conduct of WeRide's business and may intervene or influence its operations.
• WeRide may be required to complete filing procedures with the China Securities Regulatory Commission in connection with its future offerings.
• There has been no public market for WeRide's Class A ordinary shares or ADSs prior to this offering, and you may not be able to resell WeRide's ADSs at or above the price you paid, or at all.
• The trading price of WeRide's ADSs may be volatile, which could result in substantial losses to you.
• WeRide's 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 WeRide's Class A ordinary shares and ADSs may view as beneficial.

Future Outlook

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

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.
• From day one, we decided to tackle the challenges of commercial viability, practicability and scalability of autonomous driving.
• 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 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's autonomous driving vehicles have not caused any safety incidents as of the date of this prospectus after four years of commercial operations on open road.
• According to the Department of Motor Vehicles of the United States, L4 companies reported an average of less than 100 crashes per 100 million miles driven in 2021 compared with more than 500 crashes per 100 million miles for human drivers.
• Robotaxi platforms are estimated to have an extra gross margin headroom of at least 43% compared to traditional shared mobility platforms by 2027 in mainland China.
• Robovans are estimated to have approximately 45% lower annual operating cost compared with traditional vans by 2027 in Singapore.

Related Party Transactions

• We 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 IPO will create a public market for WeRide's shares, benefiting existing shareholders.
• The company's autonomous driving technology aims to improve transportation safety, reduce costs, and create environmental and social benefits for communities.
• The dual-class share structure will limit the ability of public shareholders to influence corporate matters.
• The company's success depends on gaining acceptance from the general public, target customers, users, and other stakeholders.

Next Steps

• The company aims to commence commercial production of its robotaxis and achieve readiness for large-scale commercialization in 2024 and 2025, respectively.
• WeRide intends to build on its technological and business milestones as a global leader to advance towards full commercialization across all use cases.
• The company will continue to innovate and maintain its leadership in autonomous driving technology by improving its algorithms and by refining and building up the technical maturity of its autonomous driving products.
• WeRide plans to continue to recruit top-notch industry talent for these purposes.
• The company intends to transform mobility and urban services around the world and establish a larger presence internationally by providing its robust autonomous driving products and services with compelling value propositions.

Key Dates

Keywords

autonomous driving, IPO, WeRide, ADS, robotaxi, robobus, robovan, ADAS, China, commercialization, technology, mobility, logistics, Bosch, regulation