WeRide Inc.(US:WRD)2025-11-11 06:06WeRide (WRD.O/0800.HK) Conference Call Summary Company Overview - Company: WeRide - Ticker: 0800.HK (H-share), WRD.O (ADR) - Founded: 2017 - Industry: Autonomous Driving - Global Presence: Operations in over 30 cities across 11 countries, with permits in seven markets including China, Saudi Arabia, UAE, Singapore, France, Belgium, and the US [16][21] Key Points Coverage Initiation - Rating: Initiated coverage on WeRide-H with a Buy/High Risk rating - Target Price: HKD39.6 for H-share and US$15.3 for ADR, adjusted from US$18.2 due to share dilution from H-share listing [1][4] Market Forecast - Robotaxi Market Growth: - Fleet size expected to grow from 3.8k units in 2025 to 538k units in 2030 and 2.3 million units in 2035 - CAGR of 169% from 2025 to 2030 and 34% from 2030 to 2035 - Total addressable market for robotaxis in China projected to reach US$15 billion in 2030 and US$68 billion in 2035, with a CAGR of 229% from 2025 to 2030 [2] Cost Reduction - Vehicle Cost: Anticipated decline in full vehicle cost per Robotaxi to US$32.4k in 2030 and US$28.2k in 2035, with a CAGR of -6% from 2025 to 2030 and -3% from 2030 to 2035 [2] Major Milestones - Expansion: Launched Robotaxi and Robobus pilots in Ras Al Khaimah, UAE, marking the third emirate of operation [3][10] Financial Projections - EPS Forecast: Updated EPS forecast for 2025-27E to Rmb -4.44/-3.89/-2.82, down from Rmb -5.34/-4.68/-3.39 due to share dilution [4] - Free Cash Flow: Expected outflow of Rmb1.58 billion in 2025, Rmb1.16 billion in 2026, and Rmb1.14 billion in 2027, with potential refinancing needed in 2027 [9] Valuation Metrics - Valuation Methodology: DCF valuation with a WACC of 17.1% and a terminal growth rate of 2% - Target Price Implications: Implies 13x 2027E PS and 1.3x 2030E PS/9.0x 2030E PE, with current trading around 8x 2027E PS and 0.8x 2030E PS/5.6x 2030E PE [4][18] Investment Strategy - High-margin Overseas Business: Significant milestones achieved overseas, with partnerships with Uber and Grab to accelerate deployment of L4 robotaxis [17][22] - Cost Advantages: Latest robotaxi model GXR priced at USD 40k with advanced computing power of 2,000 TOPS, expected fleet size of 1k units by end-2025 [17][22] Risks - High Risk Rating: Due to loss-making status and uncertainties in robotaxi development - Key Risks: Include technological challenges, business model uncertainty, safety concerns, competition, regulatory risks, cash shortages, and limited operating history [19][24] Conclusion - WeRide is positioned as a leader in the autonomous driving sector with significant growth potential in the robotaxi market, supported by strategic partnerships and cost advantages. However, the company faces substantial risks that could impact its future performance.