Shares of Chinese robotaxi firm WeRide tumbled in Hong Kong despite better-than-expected quarterly sales, potentially signaling continued investor concerns about profitability and cash burn.
WeRide's H-shares fell as much as 9.9% early Thursday before recovering some ground. The stock was 5.8% lower at midday.
Its New York-listed American depositary receipts closed 9.6% lower overnight.
The Chinese autonomous-driving firm reported an 82% on-year increase in second-quarter revenue on Wednesday after market close, and a narrowed net loss.
It cited growing robotaxi demand in China and accelerated overseas expansion for its strong sales performance.
WeRide's chief financial officer, Jennifer Li, said the company is delivering rapid revenue growth and is firmly on the path toward self-sustaining cash generation.
The headline results and upbeat guidance seem to have done little to cheer up investors, however.
Management expects cash flow to turn positive in 2028 and the company to reach breakeven in 2029, but analysts remain concerned about the pace of cash burn, a common challenge for robotaxi companies.
Analysts at Citi estimate that net cash fell by around 1.10 billion yuan in the second quarter, or about $162.4 million, while inventory increased by more than 100 million yuan and receivables by over 30 million yuan, indicating that more cash is being tied up in unsold products or amounts owed by customers.
"If such a trend continues, net cash could support only three to four quarters, which would lead to refinancing risk before 2028," Citi said.
Still, the robotaxi firm does have tailwinds to support its outlook, including Chinese authorities resuming approvals for robotaxi licenses, Citi added.
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