Phone maker, Transsion, to deepen Africa markets with Shanghai listing

Chinese phone maker, Transsion has announced plans to list in an IPO on Shanghai’s recently opened STAR Market technology board, a securities trading board run by the Shanghai Stock Exchange for technology companies in China.

The Shanghai Stock Exchange STAR market is China’s Nasdaq-styled exchanged aimed at encouraging tech companies to easily list their shares on the Shanghai bourse under less rigorous conditions required on the main listing board.

The company is the maker of the three top mobile devices dominating the African market in the form of TECNO, Infinix, and Itel.

Since making its entrance into the Nigerian and African markets over a decade ago, its low-budget phone brands have continued to dominate the mobile phone market, eroding the market share of premium brands such as Samsung and Apple.

Transsion’s listing would likely be a boom as the phone maker looks to double down on deepening its operations in Africa as it continues to compete for market share.

Transsion could raise up to 3 billion yuan (or $426 million) and plans to spend the bulk of its STAR Market raise (1.6 billion yuan or $227 million) on building more phone assembly hubs and around 430 million yuan ($62 million) on research and development, including a mobile phone R&D center in Shanghai,

It has a major factory in Addis Ababa, Ethopia, where its smartphone components are assembled, tested and completed. It also has research and development centers in Nigeria and Kenya.

The Ethiopian factory, first opened in 2011, has expanded to 1,600 employees with a production capacity of a million phones per month

Data from the International Data Corporation shows the firm generated 22.6 billion yuan ($3.29 billion) in revenue in 2018, up from 20 billion yuan a year earlier. Net profit for the year plummeted to 654 million yuan, down from 677 million yuan in 2017.

It sold 124 million phones globally in 2018, in Africa, Transsion holds 54% of the feature phone market — through its brands Tecno, Infinix and Itel — and in smartphone sales is second to Samsung and before Huawei.

Transsion, was founded by Chinese entrepreneur Zhu Zhaojiang in 2006 and plans to issue at least 80 million shares, though it has not set exact terms yet, that would give the company a valuation of at least 30 billion yuan ($4.4 billion).

OLUFIKAYO OWOEYE