Investment Rating - The report assigns a "Buy" rating to WeRide (0800.HK) for its potential in the L4 autonomous driving market [4]. Core Insights - WeRide is a leading player in the global L4 autonomous driving sector, with operations in 11 countries and 30 cities, and holds autonomous driving licenses in seven countries, making it unique in the industry [1][15]. - The company has shown significant revenue growth, with FY25H1 revenue reaching 200 million RMB, a year-on-year increase of 32.8%, driven by a substantial 230% increase in product revenue [1]. - The Robotaxi business is expected to benefit from cost reductions and supportive policies, with a projected global market size of 66.6 billion USD by 2030 [2][44]. Summary by Sections Company Overview - WeRide was established in 2017 and plans to go public on NASDAQ in October 2024, aiming to be the first global autonomous driving stock [1][15]. - The company has a comprehensive technology stack from L2 to L4, providing solutions for mobility, logistics, and sanitation [1][15]. Robotaxi Business - The Robotaxi segment is focusing on cost reduction through various strategies, including decreasing hardware costs and optimizing the remote safety operator model [2][32]. - The company is expanding its Robotaxi operations in the Middle East, with significant growth in fleet size and revenue [3][4]. Financial Projections - Revenue forecasts for WeRide are 587 million RMB in 2025, 1.13 billion RMB in 2026, and 2.02 billion RMB in 2027, with corresponding price-to-sales (P/S) ratios of 34x, 17x, and 10x [5][4]. - The company is expected to achieve a gross profit of 60 million RMB in FY25H1, reflecting an 11.5% year-on-year increase [1]. Market Potential - The global Robotaxi market is projected to grow significantly, with China expected to capture a substantial share, reaching 39 billion USD by 2030 [44]. - The report highlights that the current penetration rate of Robotaxi in China is low, indicating significant growth potential as technology and policies evolve [44].

Core Viewpoint - The fierce competition between Pony.ai and WeRide, two leading companies in the autonomous driving industry, has escalated as they prepare for their simultaneous IPOs in Hong Kong, reflecting the intense rivalry and strategic positioning within the sector [3][16]. Group 1: Competitive Dynamics - The public dispute between Pony.ai and WeRide highlights the high stakes involved in their upcoming IPOs, with both companies vying for the title of "first Robotaxi stock" in Hong Kong [4][5]. - WeRide's CFO publicly criticized Pony.ai's presentation for containing misleading information, indicating the deep-rooted competitive tension between the two firms [10][11]. - The involvement of Baidu in the dispute adds another layer to the competitive landscape, transforming a one-on-one conflict into a broader confrontation [12][13]. Group 2: Market Positioning and Strategies - Pony.ai focuses on a specialized approach, concentrating on Robotaxi and Robotruck services, while WeRide adopts a diversified strategy, exploring multiple applications including Robotaxi, smart buses, and logistics [20][22]. - The market for L4 autonomous driving technology is seen as a blue ocean opportunity, with significant growth potential projected for the coming years [18][20]. - Both companies are experiencing rapid revenue growth alongside ongoing losses, indicative of the industry's current phase of investment for scale [29][30]. Group 3: Financial Performance and IPO Details - Pony.ai's IPO is expected to raise up to 77 billion HKD, making it the largest IPO in the global autonomous driving sector for 2025, while WeRide aims to raise approximately 23.9 billion HKD [27][29]. - On their listing day, both companies experienced stock price declines, reflecting market skepticism despite their ambitious fundraising efforts [29][30]. - Financial data shows that WeRide reported a revenue of 127 million CNY in Q2 2025, a 60.8% increase year-on-year, while Pony.ai reported 154 million CNY, a 75.9% increase, highlighting the competitive revenue growth in the sector [29][30].