Once competing with Samsung for folding screens, now this Chinese company can’t even afford to pay employees

As the company that introduced the world’s first folding screen device and was once considered a potential competitor of Samsung in this field, but a recent report shows that the Chinese company Royole Corporation is having problems The cash problem is so serious that it has delayed paying employees for many months.

A recent report by Caixin Global said that many Royole employees have not received their salary since October until now. This comes just months after the company abandoned its IPO process on Shanghai’s STAR stock exchange in February of this year.

However, in response to this report, Royole said that the company is currently operating normally, and employees who have delayed wages will be compensated with a corresponding amount and stock options.

Industry experts said that, although it was the first company to introduce folding screen products, its poor financial situation, low level of usefulness as well as the risk of not being able to sell the product are becoming a threat. threaten Royole.

Many company employees revealed that Royole only paid half of their salary in September and that salary payments have been completely stopped since October. Even so, Royole did not mention the layoffs. Instead, reports said the company was just trying to find new funding.

Royole’s main investors include names like IDG Capital Partners, Alpha Wealth, Jack & Fisher Investment and CITIC Capital. Since 2017, Royole has conducted 7 different investment rounds with a total of 21 shareholders.

” Royole ‘s founder is a technical person . The team has good technology skills but lacks commercialization to guide . ” Zhang Xiaorong, director of the High-Tech Research Institute in Beijing, said.

” Royole’s unique problems are lack of commercialization and inefficient market expansion. From an industry perspective, flexible display products are too far ahead and lack good enough application scenarios. Yes technology but no market makes Royole dependent on finance to survive. Now that the financing is gone, the cash flow is also exhausted .” Zhang said.

Many in the industry also believe that Royole’s unique technology leads them to build a closed ecosystem and adversely affects market expansion as customers have to accept a different technology direction from other companies. other businesses. Meanwhile, this approach also forced Royole to build the entire supply chain and applications for it, placing an increasingly heavy burden on the company.

In fact, Royole had a cash problem for a long time. They planned to raise about 14.34 billion yuan (about 2.27 billion USD) in an IPO on the Shanghai Stock Exchange on December 31, 2020. However, this IPO was later canceled, causing the IPO to be canceled. The company’s cash problem worsened.

According to company data, Royole’s accumulated losses from 2017 to the first half of 2020 reached $502 million, while total revenue for the period was only $81 million. The company said that the reason for this loss was because the product was sold on a small scale and invested heavily in R&D for the new product. It is forecast that the loss will continue in the future.

Royole’s folding screen phone product has only sold 11 units on the Tmall e-commerce site while other products have no more than 30 orders.

Refer to GlobalTimes