CMSC has issued a research report stating that WeRide Inc. (WeRide-W) (ASX: 00800) was officially included in the Hong Kong Stock Connect scheme on June 4th. With the acceleration of overseas commercialization and the expansion of its vehicle fleet, the brokerage anticipates WeRide's revenue will achieve rapid growth. The bank forecasts the company's revenue for 2026-2028E at RMB 1.05 billion, RMB 2.03 billion, and RMB 4.81 billion, respectively, and maintains an "Overweight" rating. The key points from CMSC are as follows:

Key Developments

On June 2nd, WeRide and Uber announced plans to launch Spain's first commercial Robotaxi pilot service in Madrid. This marks their first joint venture into the European market, and Madrid will become the 12th global city for WeRide's Robotaxi service. On June 4th, WeRide Inc. (WeRide-W) was formally added to the Hong Kong Stock Connect.

Robotaxi Scale and Efficiency Gains Drive Global Commercialization

Regarding fleet scale, as of the end of April 2026, the company's global Robotaxi fleet has grown to approximately 1,300 vehicles, with about 1,000 in China. It is projected that the Robotaxi fleet will reach 2,600 vehicles by the end of 2026. The overseas commercialization process is accelerating, with the company already covering key markets such as Singapore, Abu Dhabi, Dubai, Riyadh, and Zurich. The entry into Madrid will further expand the global footprint of WeRide's Robotaxi service to its 12th city, accelerating the process of global scaled deployment.

Strengthened Uber Partnership Accelerates Five-Year, 15-City Commitment

In May 2025, the company and Uber announced they would "deploy Robotaxi services in 15 new international cities over the next five years." With the launch of the Madrid project, the partnership has now covered four cities: Abu Dhabi, Dubai, Riyadh, and Madrid. The remaining 11 cities are expected to be covered by 2030. Furthermore, according to the cooperation plan, the two parties aim to deploy tens of thousands of Robotaxis globally, with the fleet scale progressively expanding.

Strong Q1 2026 Performance, Sequential Improvement Expected

The company reported total revenue of RMB 114 million for Q1 2026, a year-on-year increase of 57.6%. Product revenue, driven by sales of L4 vehicles including Robotaxis, surged 115.8% year-on-year. Gross margin remained healthy at 34.7%, and operating losses narrowed by 1.2% year-on-year. The company's total cash, deposits, and financial products on hand amounted to RMB 6.22 billion, indicating robust financial health sufficient to support subsequent expansion. Performance in Q1 is expected to be the low point for the year due to seasonal factors, with revenue anticipated to improve sequentially each quarter. The company forecasts Q2 2026 revenue between RMB 170 million and RMB 180 million, representing year-on-year and sequential growth exceeding 30%.

Vehicle Model Iteration Reduces Costs, Share Buyback Reflects Management Confidence

(1) Model Iteration: The upgraded, pre-production mass-market Robotaxi model GXR is scheduled for official launch within 2026. The production cycle per GXR vehicle is expected to be significantly reduced from 1 hour to under 10 minutes, potentially lowering vehicle costs by a further 15%.

(2) Share Repurchase: At the end of March, the company announced a plan to repurchase up to $100 million worth of its Class A ordinary shares over the next 12 months. As of early June, the total number of H-shares available for repurchase is 100 million, with 37 million shares already repurchased.

(3) Stock Connect Inclusion: The company's formal inclusion in the Hong Kong Stock Connect in June is expected to further enhance market liquidity.

Potential Risks

Risks include the pace of commercialization and industry uncertainties, sustained losses, and technological safety and regulatory risks.