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Royole Weighs Shifting IPO Activity from US to China
July 05, 2020
Chinese flexible display maker Royole Corp. is weighing an initial public offering in China after filing, confidentially, for a U.S. IPO that could raise about $1 billion, according to Bloomberg News. Considerations are at an early stage and no final decisions have been made. Royole planned to raise funds via a private financing round at a valuation of about $8 billion last year. But the Chinese company turned to the U.S. markets after liquidity tightened during a downturn in China’s venture capital sector, the people said. Since January relations between the U.S. and China have deteriorated sharply, with tensions spanning trade, technology and Hong Kong. Many U.S.-listed Chinese companies are considering second listings closer to home in Hong Kong, while China has been actively seeking to lure innovative technology companies to list in Shanghai and Shenzhen. Royole’s earlier investors include Knight Capital, IDG Capital, Poly Capital Management, AMTD Group, the funds of Chinese tycoon Xie Zhikun and the venture capital arm of the Shenzhen city government.
Musings Take: Royale has a low capacity Gen 5.5 flexible OLED fab and has produced a number of innovative products using flexible displays, but the volume has been so low that the company has not gained any traction in the industry. A. new Gen 6 OLED fab with ~30k substrates/month capacity would require $4-5b in capex, so the current $1b would have to come with the expectation that there would be significant support from local and central Chinese governments.
July 05, 2020
Chinese flexible display maker Royole Corp. is weighing an initial public offering in China after filing, confidentially, for a U.S. IPO that could raise about $1 billion, according to Bloomberg News. Considerations are at an early stage and no final decisions have been made. Royole planned to raise funds via a private financing round at a valuation of about $8 billion last year. But the Chinese company turned to the U.S. markets after liquidity tightened during a downturn in China’s venture capital sector, the people said. Since January relations between the U.S. and China have deteriorated sharply, with tensions spanning trade, technology and Hong Kong. Many U.S.-listed Chinese companies are considering second listings closer to home in Hong Kong, while China has been actively seeking to lure innovative technology companies to list in Shanghai and Shenzhen. Royole’s earlier investors include Knight Capital, IDG Capital, Poly Capital Management, AMTD Group, the funds of Chinese tycoon Xie Zhikun and the venture capital arm of the Shenzhen city government.
Musings Take: Royale has a low capacity Gen 5.5 flexible OLED fab and has produced a number of innovative products using flexible displays, but the volume has been so low that the company has not gained any traction in the industry. A. new Gen 6 OLED fab with ~30k substrates/month capacity would require $4-5b in capex, so the current $1b would have to come with the expectation that there would be significant support from local and central Chinese governments.
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