Royole founder Liu Zihong posted late at night: The darkest moment of life, never give up

At 1:23 a.m. on December 9, Liu Zihong, founder, chairman and CEO of Royole Technology, quoted "Musk Recalls the Edge of Bankruptcy: Waking Up Every Day, Crying in a Dream All Night" on his personal social media, and posted: In fact, everyone has had an easy time. In the darkest moments of life, don't expect to send charcoal in the snow, the only thing you can do is to stick to the end and never give up.

It is reported that Royole is in the next round of financing, and the employees' wages in October have not been paid as scheduled. As of press time, Royole officials have not responded to issues such as salaries.

The ability to land "disputed" products

In the 9 years of entrepreneurship, Royole Technology has been full of controversy in its growth.

At the age of 26, he received his Ph.D. in electrical engineering from Stanford University in the United States, and Liu Zihong co-founded Royole Technology with his partners in 2012. In the second half of 2019, Royole Technology completed the F round of financing, with a pre-listing valuation of $6 billion, becoming one of the fastest growing unicorn technology innovation companies in the world.

On the flexible screen, "jumped out" of the mainstream track and chose independent research and development, but the large-scale landing of "no product" has always been the biggest question to royole technology.

From a technical point of view, self-developed full flexible screen technology was once the core reason for its high valuation.

In the public information, Royole said that it has reserved more than 3,000 core independent intellectual property rights at home and abroad, independently developed an ultra-low temperature non-silicon process integration technology system (ULT-NSSP), using different material systems and different process processes than traditional low-temperature polysilicon (LTPS), the overall production process has been greatly simplified, the equipment investment cost has been greatly reduced, the yield rate has been significantly improved, and the product bending reliability is extremely strong.

"There are basically only two full flexible screens in the industry, one is our ULT-NSSP technology, this set of technology is completely Royole from 0 to develop a new technical route, the other is polysilicon technology, the industry called LTPS technology route, this technical route is actually in the traditional LCD display and traditional OLED fixed curved display in the development of relatively fast, the system is also relatively perfect." Liu Zihong once said in an interview with reporters that the most obvious difference between the two in form is that the fixed curved screen cannot be reliably bent and curled many times in the hands of the user, while the full flexible screen can still achieve hundreds of thousands of curls in the hands of the user.

Liu Zihong said that due to the use of different materials, the cost advantage of ULT-NSSP technology is more obvious. Taking the folding screen mobile phone as an example, Royole's first generation of folding screen replacement cost is only half of that of friends. In the past, we said that the first and second phases of the plant investment of 11 billion, others think that we are just doing a do, playing, but in fact, can not use the traditional technology path to see. ”

"Innovative enterprises have no historical baggage, barefoot is not afraid to wear shoes, a lot of innovation we can not just look directly to see whether it has reached a certain commercial achievement in a short period of time." Liu Zihong said in a previous interview that the amount of products is not large enough to fill the streets, but in fact, it is not a concept, and the number of cooperative customers around the world has reached 500, including Louis Vuitton, Airbus and so on.

However, from the previously released prospectus, Royole's main business includes two parts, one is a B-end full-flexible display or a full-flexible sensor solution product, and the other is a C-end consumer product, such as Roupai mobile phone, Rouji intelligent handwriting, Royole Moon and Royole X (VR mobile cinema), etc. In the three-and-a-half-year reporting period, the top five customers of Royole's prospectus did not have a continuous cooperation company. However, from the data point of view, the sales amount of the top five customers accounted for nearly 70% of the total sales in the first half of 2020.

At the same time, the C-end also failed to supply blood to Royole in time. During the reporting period, Royole Technology's cash flow was -358 million, -612 million, -810 million and -386 million, respectively, indicating that its capital chain tended to be tight.

Is technology two steps ahead of the "martyrs"?

Liu Zihong has always been a "school bully" in the eyes of his peers.

In 2000, Liu Zihong entered the Department of Electronic Engineering of Tsinghua University with the result of the science college entrance examination in Fuzhou City, Jiangxi Province. In 2004, after graduating from the undergraduate degree, he continued to pursue a master's degree at the Institute of Microelectronics of the Department of Electronic Engineering of Tsinghua University. In 2006, after graduating with a master's degree, he went to Stanford University to pursue a doctorate in the Department of Electrical Engineering. Prior to starting his business, he was a consultant engineer and research scientist at IBM's Global R&D Center.

When talking about the difficulties of starting a business, Liu Zihong told the first financial reporter in an interview in May last year, "From scratch, the production line is drawn by our engineers one by one, and we think of doing it, rather than seeing it." ”

He believes that technological innovation should be inclusive, and Royole is relatively lucky.

On November 7, 2019, Liu Zihong ranked 222nd in the 2019 Forbes China 400 Rich List with a wealth value of 11.95 billion yuan. If the listing is successful, according to the calculation of the proposed new shares in the issuance plan, the valuation of Royole Technology will reach 57.736 billion yuan after the issuance.

But there is no "if" in real life.

On the evening of February 10 this year, the information on the official website of the Shanghai Stock Exchange showed that the review status of the IPO of Royole Technology Science and Technology Innovation Board was changed to "terminated". According to the SSE's disclosure of the decision to terminate the listing review of Royole Technology, Royole Technology and the sponsor CITIC Securities submitted an application for withdrawal of listing application documents on February 9, and the SSE therefore terminated the review of its listing on the Science and Technology Innovation Board.

As for the reason for withdrawing the application, Royole officials did not respond. However, it is reported that in addition to operational problems, royole's shareholder structure has a direct level of "three types of shareholders" and other situations that need to be further demonstrated, so it has chosen to suspend the application for listing on the science and technology innovation board.

After the unsuccessful listing, the pressure on capital and the market gradually became prominent.

It is reported that due to the failure to pay salaries as scheduled in October, on the afternoon of November 30, Liu Zihong held a full staff meeting to communicate with all employees about the company's capital status, indicating that financing is underway and it is expected that funds will enter in December. On some workplace social platforms, discussions about Royole's salary arrears have also begun. "Last year's year-end bonus was not issued, and the reimbursement dragged on for more than half a year without giving money." Some employees said so on the platform.

From the perspective of R&D investment, the panel track where Royole is located is a "heavy capital" track.

According to the data, royole technology's R&D expenses in the first half of 2017-2020 were 160 million yuan, 490 million yuan, 590 million yuan and 580 million yuan, respectively, and the R&D expense rates were as high as 247.87%, 447.88%, 258.25% and 502.01% respectively. R&D expenses in the first half of 2020 are close to the R&D investment in the whole year of 2019. As of the end of June 2020, Royole's monetary funds were 848 million yuan.

According to royole's previously disclosed prospectus, in the reporting periods of 2017, 2018, 2019 and January-June 2020, royole technology operating income was 0.65 billion yuan, 109 million yuan, 227 million yuan and 116 million yuan, respectively, and the net profit attributable to the parent common shareholders in the same period was -359 million yuan, -802 million yuan, -1.073 billion yuan and -961 million yuan, with a total loss of 3.2 billion yuan.

Royole said that the main reason for the continuous loss is that the product is still in the market expansion stage, the sales scale is small and the research and development needs to invest a lot of money. Royole is expected to continue to lose money in the future, and the amount of loss may continue to expand.

"Royole's exploration on the road of innovation is worthy of respect, but technology one step ahead is a hero, two steps ahead is a martyr, and the market determines everything." A shenzhen entrepreneur said so.