WeRide (00800) Report Interpretation

Overview

This earnings review examines WeRide’s 2Q26 results and Robotaxi operating progress. Goldman Sachs remains positive on expansion in China and overseas, rising utilization and a business-model migration that it expects to support improving profitability as revenue scale increases.

Core views

WeRide reported 2Q26 revenue of Rmb232m, up 82% year on year and 103% quarter on quarter, 14% above Goldman Sachs’ Rmb203m estimate. Both product and services revenue contributed, growing 54% and 107% year on year, respectively. Gross profit reached Rmb87m and gross margin improved to 37.5%, versus 28.1% in 2Q25 and 34.7% in 1Q26. Operating loss was Rmb446m, compared with a Rmb452m loss a year earlier and broadly in line with Goldman Sachs’ Rmb443m estimate; net loss was Rmb401m, versus the Rmb393m estimate. The report views the still-large losses in the context of continued R&D investment alongside a substantially larger revenue base. The central operating thesis is Robotaxi scaling. WeRide’s global Level-4 fleet comprised about 3,400 vehicles as of 31 July 2026, including 1,800 Robotaxis, up from 1,300 Robotaxis at 30 April. Management maintained its target of more than 2,600 global Robotaxis by end-2026, spanning China and overseas markets. Goldman Sachs says overseas operations currently generate the majority of Robotaxi revenue. The company had about 400 vehicles in the Middle East, including Abu Dhabi and Dubai, and was expanding into Spain, Zurich and Denmark, while continuing China-market development. The report also points to better operating intensity in China: daily rides per Robotaxi increased 24% quarter on quarter to 21 in 2Q26 as coverage expanded in Beijing and Guangzhou. Goldman Sachs links this higher utilization to Robotaxi revenue growth. Combined with fleet expansion, vehicle improvement and migration of the business model, the institution expects greater revenue scale and a widening EBITDA margin to improve profitability over time. Goldman Sachs revised revenue estimates upward on stronger Robotaxi growth and lifted gross-margin forecasts by 1.3 to 2.8 percentage points for 2026-32E because of a better product mix. It also raised the operating-expense ratio to reflect higher-than-expected R&D spending. Revised net-loss estimates are Rmb1.57bn for 2026E, Rmb1.55bn for 2027E, Rmb1.41bn for 2028E and Rmb193m for 2029E, compared with prior estimates of Rmb1.56bn, Rmb1.52bn, Rmb1.38bn and Rmb204m, respectively. Earnings estimates for 2030-32E were revised by 1%, 0% and 1%. The forecasts indicate operating profit turning positive in 2030E, with net income of Rmb1.758bn in 2030E, rising to Rmb5.633bn in 2032E. The unchanged 12-month target price of HK$54.72 is based on a discounted EV/EBITDA approach using a 11.7x multiple on 2032E EBITDA, discounted back to 2027E with a 10.8% cost of equity. The cost of equity uses beta of 1.2, a 3.0% risk-free rate and a 6.5% market-risk premium. Goldman Sachs derives the target multiple from peers’ relationship between EV/EBITDA and the combination of forward EBITDA growth and EBITDA margin, together with WeRide’s own forward EBITDA growth and margin. The target implies 2027E P/S of 22.5x, down from the prior 23.0x but above WeRide’s average since listing of 20x; the report considers this justified by fleet expansion across China and overseas and margin expansion as fleet size rises.

Analysis framework

Goldman Sachs first compares quarterly revenue, margins and losses with its estimates, then assesses fleet size, geographic expansion and rides per vehicle as the drivers of Robotaxi revenue. It incorporates these operating developments into long-term revenue, margin, R&D and earnings forecasts, and values WeRide on a discounted forward EV/EBITDA basis benchmarked against peer growth-and-margin relationships.

Methodology notes

• Valuation methodsEV/EBITDA valuation

  Discounted 2032E EV/EBITDA valuation

  Goldman Sachs applies an 11.7x multiple to 2032E EBITDA and discounts the resulting value back to 2027E using a 10.8% cost of equity to reflect WeRide’s long-term growth profile.

• Industry AnalysisVolume-price decomposition

  Fleet expansion and daily rides per vehicle as Robotaxi revenue drivers

  The report uses the number of Robotaxis and rides per vehicle to explain how greater coverage and utilization can increase Robotaxi revenue.

Asset mapping & comparison

Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).

• WeRide (00800.HK)

  Primary covered company; Goldman Sachs expects Robotaxi fleet expansion and higher vehicle utilization to support revenue growth and future margin improvement.

  Strengths

  2Q26 revenue growth, improving gross margin, expanding global Robotaxi fleet, overseas revenue contribution and higher daily rides per vehicle.

  Weaknesses

  The company remains loss-making and continues to require substantial R&D spending.

  Comparison

  The 11.7x target EV/EBITDA multiple is derived using peer relationships between valuation, forward EBITDA growth and EBITDA margin.

  Risks

  Slower fleet expansion, fiercer pricing competition, regulation and slower vehicle or ADK cost reduction.

Key data

• 2Q26 revenueRmb232m+82% YoY and +103% QoQ; 14% above Goldman Sachs’ Rmb203m estimate.
• 2Q26 gross margin37.5%Up from 28.1% in 2Q25 and 34.7% in 1Q26.
• 2Q26 operating lossRmb446mVersus a Rmb452m loss in 2Q25 and broadly in line with Goldman Sachs’ Rmb443m estimate.
• 2Q26 net lossRmb401mBroadly in line with Goldman Sachs’ Rmb393m estimate.
• Global Robotaxi fleet1,800 vehiclesAs of 31 July 2026, versus 1,300 as of 30 April 2026; management target is more than 2,600 by end-2026.
• Daily rides per Robotaxi21 ridesUp 24% QoQ in 2Q26.
• 12-month target priceHK$54.72Unchanged; based on discounted 2032E EV/EBITDA.

Impact & implications

The report argues that faster fleet deployment, overseas revenue contribution and better Chinese operating utilization can drive revenue growth and improve margins despite elevated R&D spending. Its valuation continues to rely on profitability emerging as fleet scale increases over the longer term.

Risks

• Robotaxi fleet expansion in China and overseas markets could be slower than expected.
• Pricing competition could be fiercer than expected.
• Regulatory developments could adversely affect operations.
• Vehicle and ADK cost reductions could be slower than expected.