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United States securities and exchange commission logo
June 26, 2024
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.
Amendment No. 2 to
Draft Registration Statement on Form F-1
Submitted May 30,
2024
CIK No. 0001867729
Dear Tony Xu Han:
We have reviewed your amended draft registration statement and have
the following
comments.
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 a comment applies 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 this
letter and your amended
draft registration statement or filed registration statement, we may
have additional
comments. Unless we note otherwise, any references to prior comments are
to comments in our
May 15, 2023 letter.
Amendment No. 2 to Draft Registration Statement on Form F-1
Continued investment in technology, page 94
1. We note your disclosure
on page F-20 that, "The Group determined that the expenditure
on development
activities incurred during the years presented did not meet the
capitalization
criteria, because, among others, the Group cannot demonstrate, at the time
when the development
expenditure was incurred, the development activities would
generate probable
future economic benefits." Please include similar disclosure in your
MD&A when discussing
your investment in technology. Specifically discuss what you are
developing and when you
expect those development activities would generate probably
Tony Xu Han
WeRide Inc.
June 26, 2024
Page 2
future economic benefit.
2. Given your material investment in the WeRide One platform, discuss the
stage of
development of the platform as of the date of the filing. Disclose
when you expect to
generate significant revenue and profit as it relates to the WeRide
One platform.
Management's Discussion and Analysis of Financial Conditions and Results of
Operations
Key Components of Results of Operations, page 96
3. We note your response to prior comment 3. Please consider presenting
the statistical data
in a tabular format for ease of understanding the trends between
periods presented.
4. As of the date of your filing, please disclose the value of
unrecognized share-based
compensation expenses and the period you expect to recognize that
expense. We refer to
disclosure on page 113 of your filing.
Results of Operations, page 101
5. You state the decrease in robobuses sales from 2023 to 2022 was due to
a challenging
macroeconomic environment. Please discuss the challenging
macroeconomic environment
in the jurisdictions where you have sales. Discuss if this is a trend
and whether you expect
sales to increase or decrease in future periods.
6. We note your response to our prior comment 6. Please quantify what
portion of the
increase in service revenue is a result of ADAS research and
development services versus
operational and technical support services. Discuss if you expect
revenue from these
services to continue to grow or decrease in future periods.
7. When more than one factor contributes to an increase or decrease to a
line item, please
quantify each factor. In your current filing this should be done for
research and
development expenses, administrative expenses, and selling expenses.
Liquidity and Capital Resources
Cash flows and working capital, page 108
8. Please revise your discussion of cash flow from operating activities
to discuss the
underlying drivers impacting the changes in working capital. Simply
identifying that
components of working capital changed does not provide a sufficient
basis to analyze your
cash flow from operating activities.
Consolidated Financial Statements
Consolidated Statements ofXu
FirstName LastNameTony Profit
Hanor Loss, page F-3
Comapany
9. NameWeRide
We are consideringInc.
your response to prior comment 13 and may have
additional
comments.
June 26, 2024 Page 2
FirstName LastName
Tony Xu Han
FirstName LastNameTony Xu Han
WeRide Inc.
Comapany
June NameWeRide Inc.
26, 2024
June 26,
Page 3 2024 Page 3
FirstName LastName
General
10. Prior comment 20 requested a detailed legal analysis regarding whether
the Company and
each of its subsidiaries meet the definition of an investment
company under Section
3(a)(1)(A) of the Investment Company Act of 1940, as amended (the
Act ). The
Company s response did not address its subsidiaries. Accordingly, we
are reissuing prior
comment 20 with respect to the Company s subsidiaries.
11. Prior comment 21 requested a detailed legal analysis regarding whether
the Company and
each of its subsidiaries meet the definition of an investment
company under Section
3(a)(1)(C) of the Act. The Company s response did not address its
subsidiaries.
Accordingly, we are reissuing prior comment 21 with respect to the
Company s
subsidiaries.
12. Please identify the date on which the Company first believed that it
was eligible to rely on
Rule 3a-8 and the Company s expectations with respect to future
reliance on the rule. We
note that The Commission has expressed the view that an R&D company
would not be
expected to maintain perpetually a portfolio of investment securities.
See Certain
Research and Development Companies, Investment Company Act Release No.
25835
(Nov. 26, 2002) [67 FR 71915] (Dec.3, 2002) at 71918.
13. With respect to the Company s analysis under Rule 3a-(8)(a)(1),
please provide a balance
sheet for the last four fiscal quarters, identifying the relevant
research and development
expenses as a proportion of the Company s total operating expenses.
Also, identify with
specificity the Company s relevant research and development expenses
for the last four
fiscal quarters and provide a legal analysis of why, in the Company
s view, each such
expense should be considered a research and development expense under
Rule 3a-
8(b)(9).
14. With respect to the Company s analysis under Rule 3a-8(a)(2), please
provide an income
statement for the last four fiscal quarters, identifying the Company
s net income derived
from investments in securities as a proportion of the Company s
research and
development expenses.
15. With respect to the Company s analysis under Rule 3a-8(a)(3), please
provide the
Company s expenses for investment advisory and management
activities, investment
research and custody for the last four fiscal quarters.
16. With respect to the Company s analysis under Rule 3a-8(a)(4), please
discuss whether the
figure provided in the Company s response "[m]ore than 99.9% of
the Company s
investments in securities are capital preservation reflects the
number of the Company s
investments in capital preservation investments or percentage of the
Company s assets
allocated to such investments. Also, we note that Rule 3a-8(b)(4)
defines capital
preservation investment as an investment that is made to conserve
capital and liquidity
until the funds are used in the issuer s primary business or
businesses. In the release
adopting Rule 3a-8, the Commission indicated that it was adopting the
definition of
Tony Xu Han
WeRide Inc.
June 26, 2024
Page 4
capital preservation investment as proposed, which indicated
that capital preservation
investments are liquid so that they can be readily sold to support the
research and
development company s activities as necessary and present limited
credit risk. See Certain
Research and Development Companies, Investment Company Act Release No.
26077
(June 16, 2003) [68 FR 37045] [June 20, 2003], at 37048-49 (
Adopting Release ). The
Adopting Release further states that: investments in equity or
speculative debt would
not meet the definition of capital preservation investments, but would
be considered other
investments subject to the limits stated in the rule. Id.
Please discuss in detail the Company s investments in wealth
management products
managed by banks linked to bonds and explain specifically why the
Company views
these products to be capital preservation investments. In
connection with that
response, please address why the Company views these investments
as presenting
limited credit risk, whether the bonds are speculative in nature,
the credit rating, if
any, and any other factors relevant to the Company s view that
these securities
constitute capital preservation securities.
Please discuss the terms of the time deposits, including whether
the Company may
exit from such positions early and, if so, whether such exit would
be subject to early
withdrawal penalties. Further, to the extent applicable, please
explain in detail
whether and how any such restrictions on withdrawal or the
imposition of a
withdrawal penalty would impact whether such investments
constitute capital
preservation securities.
Please discuss the maturities of the wealth management products
linked to bonds and
time deposits in the context of the Company s expected time
horizon for their use in
connection with the Company s research and development
activities.
17. With respect to the Company s analysis under Rule 3a-8(a)(5), the
Company s analysis of
this requirement of the rule is conclusory and therefore does not
allow the staff to assess
the Company s position. Please discuss in greater detail the Company
s view that it
satisfies Rule 3a-8(a)(5).
18. With respect to the Company s analysis under Rule 3a-8(a)(6), please
identify the titles
and/or approximate level of seniority of the employees that devote time
to managing the
Company s capital preservation investments.
FirstName LastNameTony Xu Han
19. With respect to the Company s analysis under Rule 3a-8(a)(7), please
identify the date on
Comapany
whichNameWeRide
the Company sInc.board of directors adopted the written
investment policy referred to
in2024
June 26, the Company s
Page 4 prior response addressing Rule 3a-8(a)(7).
FirstName LastName
Tony Xu Han
FirstName LastNameTony Xu Han
WeRide Inc.
Comapany
June NameWeRide Inc.
26, 2024
June 26,
Page 5 2024 Page 5
FirstName LastName
Please contact Inessa Kessman at 202-551-3371 or Robert Littlepage at
202-551-3361 if
you have questions regarding comments on the financial statements and related
matters. Please
contact Marion Graham at 202-551-6521 or Jeff Kauten at 202-551-3447 with any
other
questions.
Sincerely,
Division of
Corporation Finance
Office of Technology
cc: Haiping Li