Text/Spades and the Sword
Royole Technology, a start-up with dual business and parallel mobile phone + flexible panel, is still trapped in the center of the storm of unpaid wages.
According to a number of media reports such as the Red Star Capital Bureau, a Royole Technology employee revealed in a recent interview that the company has been in arrears since September last year, and he has received 5 unpaid emails in 6 consecutive months. "It is always said that financing is advancing, and the funds will arrive immediately to pay back wages, but the combined salary arrears have been 100,000 yuan." The employee said. He also said that since the beginning of 2022, the number of people in the company's OA system has been decreasing, from 1800 to 700.
The storm began last December. On the 8th of the same month, a Royole Technology employee who claimed to be engaged in human resource management took the lead in attacking the company, leaving a message on the People's Network leadership message board that Royole Technology not only owed himself three months of wages, but also owed nearly a thousand wages to cleaning, security, and management personnel, and even some people's wages were owed for nearly half a year.
In the Internet age, the spread of news is always as fast as wildfire. Shortly after the message was exposed, Royole employees who claimed to be underpaid appeared on major social platforms. At that time, an employee said in an interview with Caixin that Royole only paid part of the September salary to most employees, and the October salary was fully suspended.
The above-mentioned employees said that the company's CEO Liu Zihong once released a message at the november all-staff meeting to reassure people's hearts, saying that "the company is financing, it is expected that there will be funds to enter at the end of December, and the salary will be paid in the same month or January 2022"; after the fermentation of the incident, Liu Zihong also quickly played the "emotional card", and on December 9, he forwarded an article on the edge of Musk's bankruptcy to sleep in the factory and cry all night, with the text: "In the darkest moment of life, do not expect to send charcoal in the snow, the only thing you can do is to stick to the end and never give up." ”
After this, Royole's dilemma seems to have a glimmer of hope of solving. On December 12 last year, a "person familiar with the matter" revealed to the media that Songhe Capital, which had previously participated in the three rounds of financing of Royole Technology, was leading interested investors to prepare for a new round of convertible bond financing; in January this year, another Royole Technology employee said in an interview with Interface News that the company's capital fracture problem has been "alleviated", and a part of the salary has been paid back, and another part will be issued after the Spring Festival.
However, the time has turned around in April, and Liu Zihong's pie for the employees has not been able to cash in the real money and silver. The rumored financing has not landed, coupled with the fact that there are still employees who have not received salaries, frequently speak out, and many unfavorable factors have made the company's fate once again seem confusing.
Royole Technology has always positioned itself as a subversive in the field of flexible panels. In 2018, Royole Technology released the world's first folding screen mobile phone - FlexPai before Huawei and Samsung, which successfully attracted a lot of attention. When Huawei, Samsung and other manufacturers launched their own folding screen mobile phones, Liu Zihong said in an interview that "product prices are too high will hinder the development of the industry", and the spearhead pointed directly at the 10,000 yuan folding screen models of the two head manufacturers.
However, Royole has been silent about its mobile phone sales, according to a number of media reports, 11 months after the listing of the Jong-Pai, the monthly sales of the Tmall flagship store is only 212 units - this is a rather dismal figure; to this day, Royole's new generation of folding screen Fleur 2 generation has not been able to achieve better results, observing its Jingdong self-operated stores can be found that the model is currently in stock, from the review and product Q&A this year, there are many customers who reflect that there are quality problems with the model.
In addition to selling mobile phones, Royole's main business is actually a panel supplier, and its pride in self-developed technology is also where its involvement in the field of mobile phones lies. According to Royole, its unique ultra-low temperature non-silicon process integration technology (ULT-NSSP) has a higher yield, lower cost and simpler production process than the mainstream low temperature polysilicon (LTPS) technology. Previously, the "6th generation-like" OLED production line invested and built by Royole used this process.
At the same time, it is not unusual to be a panel supplier and a mobile phone manufacturer, and Samsung has done such a strategy to the extreme. However, the financial resources of a Royole startup cannot be compared with the huge Samsung empire - after all, for a "two-pronged" company, whether it is to build a production line, engage in research and development or make products, it takes a lot of cost, energy and time.
In 2018, the "class 6" OLED production line established by Royole Investment cost it 11 billion yuan, which even exceeded its total financing amount of 1.2 billion US dollars (about 7.63 billion yuan); but from the prospectus, its total revenue in 2017-2020 was 0.65 billion yuan, 109 million yuan, 227 million yuan and 116 million yuan, and the net profit attributable to the mother was -359 million yuan, -802 million yuan, -1.073 billion yuan and -961 million yuan, respectively. Obviously, Royole, which has lost 3.1 billion yuan in three and a half years, cannot talk about self-hematopoiesis, let alone make up for the huge financial loopholes brought about by the investment production line.
Year-to-year losses also reflect one thing – Royole's products are not accepted by customers, not only the phones mentioned above, but even the panels.
According to the prospectus information, royole's capacity utilization rate in 2018 and 2019 was 15.1% and 31.2% respectively; in the first half of 2020, this figure fell to 5.3%, and only 1230 flexible displays were produced during the period; at the same time, the yield of Royole panels did not seem to be as high as Liu Zihong boasted. Previously, the display market research institute DSCC conducted a survey on the mainstream folding mobile phone panels on the market, and the results showed that royole's panel yield was much lower than that of BOE and other friendly businessmen.
Perhaps it is precisely because of these factors that Royole's B-end business has performed mediocrely. For now, except for ZTE, which has reached a strategic cooperation with it in 2020, no head mobile phone manufacturer is willing to use Royole's panel.
At the same time, Royole's listing road is also difficult, after the listing in the United States was stranded in 2019, it once turned to the science and technology innovation board, but in the end, it also failed to do so because of problems such as three types of structural shareholders.
Liu Zihong is clearly aware of the company's problems. In recent years, in addition to his own folding screen mobile phone, he has not forgotten to promote the application of flexible screens in other scenarios. In an interview, he said that any surface that requires human-computer interaction can be turned into an interactive system through the combination of flexible sensors, flexible integrated circuits and flexible displays.
"This will greatly improve the interaction experience between people and devices, and realize the future scenario of intelligent space." Liu Zihong said.
According to public information, Royole has cooperated with hundreds of companies such as Louis Vuitton, Airbus, China Mobile, Toyota, etc., and the main application products are flexible sensing intelligent switches, flexible sensing transparent phones, flexible intelligent cycling backpacks, etc.
However, after the release of these products, most of them sank into the sea, and in addition to winning a momentary eyeball, they failed to splash a bigger splash. The reason is that consumers have very little understanding of the multi-field application of flexible screens, if they do not do enough market education, flexible backpacks, flexible switches and other concept products can only stay in the concept stage forever, can not enter large-scale commercialization.
According to the DSCC report, the current flexible panel application scenarios are mainly concentrated on folding screen mobile phones, in other areas of application is very small, without the cooperation of head mobile phone manufacturers, Royole's future flexible panel road is likely to be a twist and turn.
*Image courtesy of Yandex