View:
United States securities and exchange commission logo
March 22, 2023
Tony Xu Han
Chief Executive Officer
WeRide Inc.
21st Floor, Tower A, Guanzhou Life Science Innovation Center
No. 51, Luoxuan Road, Guangzhou International Biotech Island
Guangzhou 510005
People s Republic of China
Re: WeRide Inc.
Draft Registration
Statement on Form F-1
Submitted February
23, 2023
CIK No. 0001867729
Dear Tony Xu Han:
We have reviewed your draft registration statement and have the
following comments. In
some of our comments, we may ask you to provide us with information so
we may better
understand your disclosure.
Please respond to this letter by providing the requested
information and either submitting
an amended draft registration statement or publicly filing your
registration statement on
EDGAR. If you do not believe our comments apply to your facts and
circumstances or do not
believe an amendment is appropriate, please tell us why in your
response.
After reviewing the information you provide in response to these
comments and your
amended draft registration statement or filed registration statement, we
may have additional
comments.
Draft Registration Statement on Form F-1 filed February 23, 2023
Cover Page
1. Disclose whether
listing on a national securities exchange is a condition to the closing of
the offering.
2. Please disclose the
location of your auditor s headquarters.
3. Clearly disclose how
you will refer to the holding company, subsidiaries, and VIE when
providing the
disclosure throughout the document so that it is clear to investors which
entity the disclosure
is referencing and which subsidiaries or entities are conducting the
Tony Xu Han
WeRide Inc.
March 22, 2023
Page 2
business operations. For example, we note on the prospectus cover page
that you define
we or us, to include WeRide Inc., the Cayman Islands
holding company, its
subsidiaries and, in the context of describing its operations and
consolidated financial
information, the VIE and its subsidiaries. Refrain from using terms
such as we or our
when describing activities or function of the subsidiaries or VIE.
4. Please disclose here and in the prospectus summary whether you have
written cash
management policies and procedures that dictate how funds are
transferred, and if so,
describe these policies and procedures.
Prospectus Summary
Our Go-to-Market Strategy, page 8
5. Please disclose the number of orders you have received for your
Robovan that are not
subject to conditions.
Summary of Risk Factors, page 11
6. In your summary of risk factors, disclose the risks that your
corporate structure and being
based in or having the majority of the company s operations in China
poses to investors.
In particular, describe the significant regulatory, liquidity, and
enforcement risks with
cross-references to the more detailed discussion of these risks in the
prospectus. For
example, specifically discuss risks arising from the legal system in
China, including risks
and uncertainties regarding the enforcement of laws and that rules and
regulations in
China can change quickly with little advance notice; and the risk that
the Chinese
government may intervene or influence your operations at any time, or
may exert more
control over offerings conducted overseas and/or foreign investment in
China-based
issuers, which could result in a material change in your operations
and/or the value of the
securities you are registering for sale. Acknowledge any risks that
any actions by the
Chinese government to exert more oversight and control over offerings
that are conducted
overseas and/or foreign investment in China-based issuers could
significantly limit or
completely hinder your ability to offer or continue to offer
securities to investors and
cause the value of such securities to significantly decline or be
worthless.
Permissions Required from the PRC Authorities for Our Operations, page 15
7. Please disclose each permission or approval that you, your subsidiaries,
or the VIEs are
required to obtain from Chinese authorities to operate your business.
Please also describe
the consequences to you and your investors if you, your subsidiaries, or
the VIEs: (i) do
not receive or maintain such permissions or approvals, (ii)
inadvertently conclude that
FirstName LastNameTony Xu Han
such permissions or approvals are not required, or (iii) applicable
laws, regulations, or
Comapany NameWeRide
interpretations Inc.and you are required to obtain such permissions
or approvals in the
change
March future.
22, 2023 Page 2
FirstName LastName
Tony Xu Han
FirstName LastNameTony Xu Han
WeRide Inc.
Comapany
March NameWeRide Inc.
22, 2023
March3 22, 2023 Page 3
Page
FirstName LastName
VIE Consolidating Schedule, page 19
8. Please revise your consolidating schedule to provide a separate column
for the Wholly
Foreign Owned Enterprise (WFOE). Your schedule should also show;
intercompany
revenue and expenses, services fees between the WFOE and the VIE, due
from VIE and
due to WFOE, and WFOE's share of income or loss from the VIE.
Risk Factors
Failure to continue to attract..., page 41
9. Please quantify the percentage of your revenues derived from related
parties for the
periods presented.
We utilize open-source software. . ., page 56
10. Please clarify which of your products utilize open-source software and
disclose whether
you are reliant on any third-party licenses.
Key Factors Affecting Our Performance, page 103
11. Please disclose the number of customers and units sold for the periods
presented..
Additionally, please disclose any other key metrics that management
uses to manage the
business for each period presented. Refer to Section III.B of SEC
Release No. 33-8350.
Liquidity and Capital Resources, page 116
12. You state, "As of June 30, 2022, 17.0% and 83.0% of our cash and cash
equivalents were
held in mainland China and outside mainland China, respectively."
Please disclose where
your cash is held outside of mainland China. For any cash held outside
of China, disclose
how you plan to transfer it to fund your operations in China. Also,
disclose if you plan to
re-patriate cash from outside of China.
Fair value of our ordinary shares, page 121
13. Please update your analysis of stock-based compensation awards granted
through the date
of the filing and effectiveness of the registration statement. Expand
your analysis to
specifically address how you considered various preferred share
issuances and stock
buybacks.
Critical Accounting Estimates
Share-based Compensation, page 121
14. Please disclose the value of unvested share-based compensation and
when you expect
vesting / expense to be recognized. This should be disclosed through
the date of the
filing.
15. We note your statement on page F-57 that, "The Group considered that,
for certain granted
Tony Xu Han
FirstName LastNameTony Xu Han
WeRide Inc.
Comapany
March NameWeRide Inc.
22, 2023
March4 22, 2023 Page 4
Page
FirstName LastName
restricted share units, a Qualified IPO was probable to incur after
the required service
period and recognized the share compensation expenses over the
estimated actual vesting
period, which is based on an estimate of when a Qualified IPO will
incur." Please clarify
this statement by disclosing when these restricted share units were
granted and what was
their vesting period. Disclose how you determined the vesting period.
Discuss when and
how you determined whether a Qualified IPO was probable.
Business, page 135
16. We note your disclosure on page 41 that your largest six customers
accounted for 76.8%
of your total revenue for the six months ended June 30, 2022. Please
include a separate
section that discusses the material terms of your agreements with
those customers
including the term and termination provisions. Refer to Item 4.B.6 of
Form 20-F.
Strong partners and investors across value chain, page 143
17. Please disclose how you define blue-chip investors and indicate the
number of investors
you have that are considered "blue-chip."
Our Products and Services, page 144
18. You state on page 146, that you "partner with multiple world-class
OEMs on autonomous
driving research and development projects as well as the manufacturing
of L4 autonomous
driving vehicles." Please disclose more information about your
relationships and how you
account for the various partnership arrangements.
ADAS Solutions, page 149
19. Please define your reference to a Tier 1 supplier.
Management
Compensation of Directors and Executive Officers, page 190
20. Please update this section include executive compensation disclosure
for the year ended
December 31, 2022. Refer to Item 6.B. of Form 20-F.
Related Party Transactions
Other Related Party Transactions, page 196
21. Please file the agreements with Alliance Ventures B.V. and Guangzhou
Yuji Technology
Co., Ltd. as exhibits to your registration statement. Refer to Item
601(b)(ii)(10)(A) of
Regulation S-K.
Consolidated Financial Statements
Consolidated Statements of Profit or Loss, page F-3
22. Please disclose the amounts of related party transactions on the face
of your consolidated
Tony Xu Han
FirstName LastNameTony Xu Han
WeRide Inc.
Comapany
March NameWeRide Inc.
22, 2023
March5 22, 2023 Page 5
Page
FirstName LastName
statements of profit and loss. We refer you to the guidance in Item
4-08(k) of Regulation
S-X.
23. We note in footnote 6 the items included in the Other net income
line-item. Please explain
to us your rationale for including these items in the calculation of
operating loss in your
consolidated statements of profit or loss.
Notes to the consolidated financial statements
2 Significant accounting policies
(f) Intangible assets (other than goodwill), page F-18
24. You state that "Expenditure on development activities is capitalized
if the product or
process is technically and commercially feasible and the Group has
sufficient resources
and the intention to complete development." In this regard, disclose
what portion of your
development activities have been capitalized versus expensed as
research and
development expense. If the majority of your development activities
have not been
capitalized, disclose that and explain why. Refer to your basis in
accounting literature.
(k) Cash and cash equivalents, page F-23
25. We note your statement that, "Cash and cash equivalents comprise cash
at bank and on
hand, demand deposits with banks and other financial institutions, and
short-term, highly
liquid investments that are readily convertible into known amounts of
cash and which are
subject to an insignificant risk of changes in value, having been
within three months of
maturity at acquisition." Please disclose the jurisdictions that hold
specific amounts of
cash. Disclose the extent various jurisdictions insure your cash.
Also, expand your
disclosure to discuss your intention of transferring cash within your
organization. Discuss
restrictions on your ability to transfer cash as noted on page 117 of
your filing.
(x) Revenue and other income, page F-28
26. On page 36 you state that "we currently partner with OEMs to
manufacture our
autonomous driving vehicles, instead of manufacturing the vehicles on
our own." We also
note, that it appears you do not have vehicles recorded as part of
your inventory on page
F-41. In this regard, please tell us and disclose how you considered
whether you are a
principal or agent in the arrangement in accordance with IFRS 15.
27. You state that the "the sale of robobuses/robotaxis and the provision
of the landing
deployment services are accounted for as a single performance
obligation." Please
explain in detail what landing deployment services you provide.
Clarify in your filing
why robobuses/robotaxis require the associated landing deployment
services.
28. With regards to ADAS solutions, you state on page 149 that you
"collect development
fees and royalties in respect of the services we deliver under this
partnership." Please
enhance your revenue recognition disclosure to describe how you
account for royalties.
4 Segment reporting, page F-32
Tony Xu Han
WeRide Inc.
March 22, 2023
Page 6
29. We note you have various business lines as disclosed on page 142. Tell
us how you
considered whether these are individual segments. Also, please disclose
revenues from
external customers for each product and service, or each group of
similar products and
services, in accordance with IFRS 8 paragraph 32.
31 Principal subsidiaries, page F-66
30. We note your have a column labeled "Group's effective interest (direct
or indirect)."
Please disclose which entities are consolidated through direct equity
ownerships and
which entities are consolidated due to VIE accounting rules. Avoid
disclosure that
implies 100% ownership of VIEs.
General
31. Please supplementally provide us with copies of all written
communications, as defined in
Rule 405 under the Securities Act, that you, or anyone authorized to do
so on your behalf,
present to potential investors in reliance on Section 5(d) of the
Securities Act, whether or
not they retain copies of the communications.
You may contact Inessa Kessman, Senior Staff Accountant, at
202-551-3371 or Robert
Littlepage, Accounting Branch Chief, at 202-551-3361 if you have questions
regarding
comments on the financial statements and related matters. Please contact Marion
Graham, Staff
Attorney, at 202-551-6521 or Jeff Kauten, Staff Attorney, at 202-551-3447 with
any questions.
Sincerely,
FirstName LastNameTony Xu Han
Division of
Corporation Finance
Comapany NameWeRide Inc.
Office of
Technology
March 22, 2023 Page 6
cc: Haiping Li
FirstName LastName