As a former capital darling, Rouyu technology, which has the world's leading flexible screen technology, has been repeatedly supported by many venture capital institutions. Multiple rounds of equity and debt financing have accumulated nearly 10 billion yuan. It was once a "unicorn" enterprise with a valuation of more than 50 billion yuan.
However, leading technology and capital support have not been transformed into market competitiveness. After the continuous consumption of capital, there have been continuous negative rumors about Ruoyu technology recently, including salary arrears, resignation of core personnel, and even the rumor of "all staff vacation". Liu Shuwei, the company's independent director and well-known scholar, has repeatedly issued articles calling for "saving Rouyu", hoping that the government will help introduce strategic investors to alleviate the urgent need for funds.
What happened to Ruoyu technology? Can Ruoyu technology get out of the dilemma?
The reporter of securities times · e company recently visited the office area and production base of the headquarters of Ruoyu technology in Shenzhen and interviewed the investors, employees, peers and industry experts of Ruoyu technology. From the scene, Rouyu technology does not have a holiday for all staff, and the production line is also running, but the operation volume is not saturated. The investors of Rouyu technology are cautious and unwilling to make additional investment. Peers believe that the technical route of Rouyu technology is no problem, but it is not easy for products to be mass produced and pass the market inspection. Some employees attribute the responsibility to the company's founder's poor management and inefficient operation under the high concentration of power.
The reporter of securities times · e company sent an interview outline to Liu Zihong, founder, chairman and CEO of Rouyu technology, and got a reply. Liu Zihong said that thanks for your concern and support. There are too many things in the near future, so it's inconvenient to be interviewed, and then find a suitable time to communicate.
In December last year, Liu Zihong lamented in his circle of friends that he didn't expect to provide charcoal in the dark, "the only thing he can do is to stick to it and never give up."
scene: not all employees are on holiday
At the beginning of April, Rouyu technology was placed on the cusp of public opinion due to rumors such as "all employees have a holiday". At that time, an employee of Rouyu technology told reporters that the company orally informed all employees to have a three-month holiday. After that, people related to Rouyu technology refuted the rumor, saying that the company still had employees at work and did not have a holiday for all employees.
On a working day in late April, a reporter from the securities times came to the Ruoyu technology headquarters located in the joint headquarters building of high tech Zone, Nanshan District, Shenzhen. The company previously rented two floors, 18 and 19, but now the door of the office area on the 18th floor has been closed and the 19th floor remains in normal operation.
Through the front desk on the 19th floor, the reporter saw that there are still a small number of employees working. The front desk executive told reporters that the company did not release the notice of all employees' holiday. He has been working in the company since the Qingming Festival.
Subsequently, the reporter went to the flexible display base of Rouyu technology in Longgang District, Shenzhen. There are many vehicles parked in the park, and some workshops are on. Park Security said that the company did not issue a holiday notice and declined the reporter's request to enter the base on the grounds of "no reservation code".
The reporter observed nearby for about two hours. At the same time, the pipeline marked "acid exhaust" is also in normal working condition. Occasionally, employees enter and leave the park.
At more than 5 p.m., close to the off-duty time, about one-third of the floors of the main office building of the base turn on lights one after another. Just after 6 o'clock, many employees came out of the park, and three buses drove to the door on time. At about 6:15, the lights of the main office building went out to only one floor.
From this point of view, Rouyu technology does not have a full holiday, and the production base is still struggling to maintain its operation.
From the article "saving Rouyu" released by Liu Shuwei, the independent director of the company, we can see that Rouyu technology is very poor now. Liu Shuwei said that before the company had time to explore the market and create sufficient operating cash flow, there was a shortage of funds, resulting in the normal operation of the flexible screen production line and the continuous research and development work.
investor reflection: lack of excellent products
From May 2012 to September 2021, Ruoyu technology conducted 8 rounds of financing, obtained equity investment of about 6.197 billion yuan, debt financing of about 3.653 billion yuan, and the valuation once exceeded 50 billion yuan. The main reason for the favor of capital is that Rouyu technology has technology and talents.
Zhang Qiang (pseudonym) is the investor of Rouyu technology. He said that from the perspective of R & D, Rouyu has indeed come out from 0 to 1 and is a leader in the industry. Founder Liu Zihong was born in a famous school and has a good resume. The folding screen belongs to a relatively cutting-edge technology. These are the places where investors were excited at the beginning.
However, the products of Ruoyu technology have not been truly recognized by the market, and the sales of the two flexpai folding phones are poor. Many friends around Zhang Qiang have used it, reflecting a lot of slot points. The quality is hard, and the user experience is not ideal. Naturally, other mobile phone manufacturers will not purchase on a large scale.
Zhang Qiang said that the business prospect of the application of flexible screen technology is considerable, but whether the prospect can be realized depends on the product and market-oriented sales performance. Ruoyu technology has not produced excellent products, and its sales have not brought healthy operating cash flow.
During the nearly ten years from its establishment in May 2012 to September 2021, in addition to obtaining nearly 10 billion yuan of equity and debt financing, the total cash inflow from the operating activities of Ruoyu technology was only 1.717 billion yuan.
In June 2018, Rouyu technology built and put into operation the world's first mass production line of collapsible full flexible display screen in Longgang District, Shenzhen, with an investment of 6.5 billion yuan, which is only 1 / 7 of the traditional display panel production line with the same output scale The investment of traditional panel production line is 46.5 billion yuan.
With a relatively low investment, is it too harsh for Ruoyu to make global leading products? Should shareholders continue to support? Zhang Qiang believes that the vision can be talked about in the early stage, and the production line has been built without phased results, which means that there is a bottleneck in technology maturity.
Afterwards, Rouyu's mobile phone may not be a good choice. It was originally a company to B. it faced C-end users, and the challenges were completely different. In order to make mobile phones, Rouyu technology has recruited many additional people, which is also one of the reasons for the rapid consumption of funds.
However, even the more than 2000 employees in the peak period are too small compared with the mature mobile phone team. Ruoyu technology is difficult to compete with mainstream mobile phone manufacturers, not to mention making panels. Zhang Qiang believes that at that time, Rouyu had a special situation in making mobile phones, downstream manufacturers did not purchase supporting products, and the output was small. As a company that first ate crabs in the industry, it was not easy to get out. Sun Yanbiao, chairman of Xuri big data, also held a similar view. Ruoyu technology wants to take into account the to B and to C markets. In fact, it acts as both a supply chain manufacturer and a terminal enterprise. Facts have proved that this road is difficult to take.
Yuan Bo, a communication engineer and strategic planning expert, told reporters that in the past development of Rouyu technology, it paid attention to technology and ignored commercial landing, which led to its continuous support by financing rather than commercial sales, which is not a benign development.
Prepared by: Chen Lixiang
employees feel that although technology is good, management is not good
There are two main technical routes for flexible screens. One is the polycrystalline silicon (LTPs) technology developed by BOE, Tcl Technology Group Corporation(000100) , Samsung and other companies. Almost all the main folding screen mobile phones and other products on the market are supplied by these companies.
The other is the ultra-low temperature non silicon process integration technology (ult-nssp) independently developed by Rouyu.
According to Liu Zihong's previous introduction, ult-nssp technology is better than LTPS in mass production capacity. The reason is that different material systems and different manufacturing processes are adopted, the overall production process is greatly simplified, the equipment investment cost is greatly reduced, the yield is significantly improved, and the bending reliability of products is very strong.
According to an executive of Huaxing optoelectronics, China's leading panel manufacturer, from the perspective of technical route, Rouyu is not alone. Korean LG and Japanese enterprises are also doing it, among which LG is making rapid progress. "The core of this product is not how thin the screen is, Samsung can also be very thin. This is not a bonus item. As for the production temperature, it doesn't make much sense." He said, "Rouyu's technical route is no problem, but it's too far away. It's a long way from technology to mass production. It's difficult for the academic school to deal with it only by relying on a few laboratories."
Chen Ming, who has worked in Ruoyu technology for more than two years, said that Ruoyu technology is really great, the background of the founder is impeccable, and the development of the flexible screen industry has also been booming in recent years. Rouyu's predicament has a lot to do with Liu Zihong's personal feelings and management weaknesses. Liu Zihong's goal is too high, which makes Rouyu's road narrower and narrower.
"The boss's vision is very ambitious. He wants to be a pioneer in creating a flexible planet. It's too idealistic. It can be fatal for a start-up company." Chen Ming said.
He believes that the flexible technology of Rouyu can indeed play a role in many fields, but it is still in the stage of technology popularization in the first two years. With the limited production capacity of Rouyu, it should be fully launched in various fields such as aviation and consumer electronics. This "broad but not specialized" playing method makes it impossible to continuously penetrate in any industry, which poses a great challenge to the company's cash flow.
Liu Zihong is an excellent scientist, but he is not good at enterprise management, which is one of the important reasons for Rouyu's "high opening and low going". "In the past two years, I feel that the management of the company is too chaotic, the internal friction is too serious, and the work efficiency is extremely low." Chen Ming said, "everything needs Liu Zihong's approval. The power is highly concentrated. The people under him have no authority and dare not make decisions."
For example, Rouyu pays attention to technical confidentiality, which is understandable. However, even if employees want to install an input method on the computer, they have to go to the IT department for approval at all levels. When the approval results are delayed, it is necessary to urge one link by one through the internal communication software, or even find someone face-to-face.
Zhang Hua is a technical staff of Rouyu and has a high evaluation of Liu Zihong. He believes that Liu Zihong's "perfectionism" on start-ups such as Rouyu has disadvantages.
"Liu Bo is really great. His flexible technology doesn't copy Samsung when it comes to commercial transformation, and the design of large-scale production lines doesn't copy foreign practices. He has really achieved independent intellectual property rights, and the cost is much lower than that in the industry." Zhang Hua said that if this achievement is placed on enterprises with a certain customer base, such as TCL and BOE, it may promote the development of China's flexible screen industry in one fell swoop. However, for start-ups, there is no stable cash flow. It is too big to go from 0 to n directly.
Zhang Hua said that Liu Zihong's technology is very powerful, but he lacks planning for spending money. "The demand for money in this industry is very high. All the funds raised by Rouyu may add up to less than 10 billion yuan, but 11 billion yuan has been invested in the construction of production line alone. What about the follow-up product promotion, employee salary and technology upgrading?" He said.
Tianwen: where is the road
Whether Ruoyu technology can overcome this difficulty is the focus of attention from all walks of life.
An investor told the securities times that he is trying to help and support Ruoyu technology to tide over the difficulties, and hopes that the outside world will be more tolerant and caring. He said that Rouyu technology does have the world's leading original technology, and venture capital institutions and venture capital institutions are also willing to invest in such enterprises. It is normal for enterprises to have twists and turns in the process of development and encounter difficulties. At the beginning, venture capital institutions will have a team to track the invested projects, help enterprises find problems and try their best to solve them.
"The investment of most venture capital institutions is based on the long-term value concept, but the fund usually has an operation period, so the outside world will see the institutions withdraw from some projects halfway for many reasons. Withdrawal does not mean that they are not optimistic about relevant projects." The source said.
Enterprise investigation shows that the largest shareholder of Rouyu technology is Liu Zihong, holding 38.6%, and CITIC Capital, Shenzhen Venture Capital, Shenzhen Huigang investment, Songhe capital and Tibet Xiangsheng venture capital hold 6.05%, 4.64%, 4.06%, 3.6% and 2.53% respectively. Ruoyu technology has set up a special voting structure, and Liu Zihong accounts for 71.56% of the voting rights of the company.
In the future, if Rouyu technology can introduce new strategic investors, Liu Zihong's shareholding ratio and voting right ratio should decline. It remains to be seen whether the new investors will keep him in absolute control.
Another Rouyu technology investor told reporters that the investor is the minority shareholder of the company after all. The root of the current dilemma of Rouyu technology is that the commercialization process of the company's technology and products is less than expected, and the help that shareholders can provide in these aspects is limited. If it's just a lack of funds, investors may be able to help temporarily. However, many investors have invested for many years and have not seen a return. It is difficult to make up their mind to continue to invest money.
Zhang Qiang also believes that the founder's commitment has not been fulfilled, and it is natural for shareholders to decide not to make additional investment. This means that at present, it is difficult for Ruoyu technology to obtain funds through the continuous investment of existing shareholders, and financing needs to find another way.
Bai Wenxi, chief economist of IPG China, said bluntly that the founder of Ruoyu technology was addicted to technology, did not pay enough attention to product application and market development, and was too confident, which led to the current dilemma of Ruoyu. "If the governance structure of Ruoyu technology can not be substantially adjusted, although this folding screen technology concept is good, the company can not say the future." He said.
Wang Peng, associate professor of Renmin University of China, believes that the way out for the future of Ruoyu technology is nothing more than the change of ownership structure, the change of management team, or the intervention of relevant upstream and downstream industrial chains and financial institutions to help Ruoyu technology find large-scale users and accelerate the commercialization.
We look forward to Rouyu technology getting out of the dilemma as soon as possible.
(pseudonyms of Zhang Qiang, Chen Ming and Zhang Huawei)
Reporter observation: tolerate failure and "student entrepreneurship"
The once star "unicorn" is now in trouble. Professor Liu Shuwei shouted loudly to protect the achievements of Ruoyu technology from 0 to 1 and help Ruoyu from 1 to N. how? We need to make a comprehensive diagnosis of Rouyu to see what went wrong.
One investor described Rouyu and founder Liu Zihong as "student entrepreneurship". The idealism and lack of grounding of "student entrepreneurship" and the underestimation of the difficulty of entrepreneurship are all the reasons. It is not difficult to see that investors are unwilling to the whole project and entrepreneurial team.
There are many successful examples of students' Entrepreneurship in the world, bill. Gates, Zuckerberg, jobs and Dell all dropped out of school to start businesses. There are also successful cases of students' Entrepreneurship in China, such as Ma Huateng, who founded Tencent, and Wang Tao, who founded Dajiang.
In contrast, Rouyu's experience is more bumpy. As soon as he ends up, he will build an extremely expensive production line and break a technical route without a successful precedent. The risk is unpredictable.
No matter how successful Rouyu is from 0 to 1, he must accept the test from 1 to N. if advanced technology cannot be commercialized and products cannot be commercialized, no matter how many 0 to 1, he can't bring real gold and silver in addition to burning money.
On the surface, Rouyu's dilemma is that the production line in Longgang, Shenzhen, is extremely expensive and failed to bring enough cash flow. Behind it, it reflects the problems of actual controllers, teams, corporate governance and other aspects.
Are entrepreneurs too optimistic and give investors too optimistic expectations? Is the technical route advanced enough to resist all kinds of pursuit? Is corporate governance sound? Are major decisions scientific? Is management efficient? There are many places worth reflecting on.
Entrepreneurs should not have good feelings. Business is business. The business depends on the products. It is the greatest feeling to take out excellent products, sell them, make money, create value for the society and bring returns to investors.
In the past, Rouyu was honored as a new business card of Shenzhen innovation by many people. The color flexible screen advertising that the company is proud of can be seen on Shenzhen Airport Co.Ltd(000089) large screen and various exhibitions across the country. Now, with the halo fading, entrepreneurial teams and investors are struggling to find a way out of difficulties, and the outcome remains to be determined.
It's not easy to start a business. It's a narrow escape. Rou Yu is no exception. For Rouyu, for Liu Zihong, and for millions of people who innovate and start businesses, be more tolerant regardless of success or failure.
