Shenzhen Transsion Holdings, the makers of Techno, Infinix and itel smart-phones, has filed for an Initial Public Offering on Shanghai’s tech board, becoming one of the first among China’s home-grown technology champions to kick off President Xi Jinping’s fundraising project. The announcement did not disclose the amount of capital Transsion would raise.
The IPO came as a result of counselling from an investment bank during a three month period from December 2018 to March. Transsion was advised on finances, management and corporate governance, according to Citic Securities, the sponsor of Transsion’s fundraising.
This marks the first IPO for Shanghai’s tech board that was ordered to be established last November by president Xi to provide an alternative avenue for Chinese start-ups to raise capital. Eleven other mainland China companies said they have applied to list on the new board. The Shanghai Stock Exchange on Monday unveiled an online platform tracking the review process for the board. China Securities Regulatory Commission (CSRC) two weeks ago scrapped a valuation limit on new listings by removing the final barrier that had deterred tech companies from raising capital locally.
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Transsion, founded in 2006 by Zhu Zhaojiang, has made it a strategy to sell entry-level phones in developing economies to undercut pricier smartphones by Apple, Samsung or such Chinese manufacturers as Huawei Technologies and Xiaomi. It had 58.7 percent of Africa’s mobile phone market in 2018, according to IDC data. The Transsion’s Spark 2 model has a full display, a face-ID unlocking system, and sells for 40,500 naira (US$112) on Africa’s e-commerce platform, Jumia. The company owns and runs a production facility in Addis Ababa, Ethiopia.
With more than 10,000 employees worldwide, Transsion has a global sales network covering more than 50 countries and regions in Africa, the Middle East, Southeast Asia and South Asia, including Nigeria, Kenya, Tanzania, Ethiopia, Egypt, the UAE (Dubai), India, Pakistan, Bangladesh, and others, its website said.
“Transsion is in urgent need of money” to finance its expansion and growth, said Frank Xu, an analyst at Q Fund, Hong Kong-based hedge fund. “The company is facing more competition as it moves up the value chain to produce smartphones, and they need money to improve their infrastructure and services to attract more customers.”
Among smartphones, Transsion’s market share was 34.3 per cent, beating Samsung’s 22.6 per cent and Huawei’s 9.9 per cent. The company shipped 130 million phones last year, Transsion said, without disclosing its revenue or profit figures. Before undergoing its IPO counselling, it had considered a plan to go public through a reverse takeover of Shimge Pump Industry Group on the Shenzhen Exchange, according to a March 2018 statement.
The firm is putting a lot of efforts into developing mobile internet applications, given high mobile phone penetration rates in global emerging markets.