Transsion Holdings, a Chinese budget smartphone maker that has made great inroads into the Africa market, is working toward a listing on the new STAR Market board in Shanghai.
The Shenzhen-based firm, which filed an IPO application in March, joining the first batch of companies seeking to go public on China’s new Nasdaq-style board, won the green-light in late July for its proposal, media reports said last month.
However, it faced some problems later. On August 6, information on the Shanghai Stock Exchange’s website showed the IPO application progress as “suspended”. One day later, the message was reverted to “in progress”.
The change came after Transsion was believed to have submitted further, updated financial statements to the exchange.
“The registration application and issuance process is still underway, and the firm is continuing with preparations for the listing,” Transsion was quoted by media as saying this week.
The specific timetable is yet to be confirmed by China’s securities regulator and the Shanghai bourse, a spokesperson said, according to TechCrunch.
Founded in 2006, Transsion has been dominating sales in the African market with its affordable smartphones and feature phones, as well as handsets with physical keypads and limited functionality.
According to the company, its feature phones were priced at 65 yuan (about US$10) on average in 2018, while its smartphones cost 454 yuan on average. Expanding in developing economies with its pricing and positioning, it sold 124 million phones globally in 2018.
With its Itel, Tecno and Infinix brands, Transsion accounted for a combined 58 percent share in Africa’s mobile phone market last year, according to market research firm IDC. Transsion also led the smartphone market with a 34 percent share, leaving Samsung and Huawei behind.
The firm recorded 22.6 billion yuan (US$3.29 billion) in revenue in 2018, up from 20 billion a year earlier, but net profit dropped to 654 million yuan from 677 million.
Transsion was the first mobile phone company to build a manufacturing base in Africa, launching a factory in Addis Ababa, the capital of Ethiopia, in 2011. It also has factories in China, India, and Bangladesh.
According to its prospectus, Transsion aims to raise up to 3 billion yuan (US$426 million) in its IPO on the STAR Market, with plans to spend about 1.6 billion yuan on creating new phone assembly hubs.
Transsion’s absence on the STAR Market board’s first day of trading on July 22 was noticed by some observers, who interpreted it as a sign that the listing threshold remains high for the new board.
To attract tech firms to list domestically, Shanghai’s Science And Technology Innovation board, also known as STAR Market board, allows pre-profit ventures, including pre-revenue biotechnology startups, to list, as it lowered profitability requirements for the board, with its registration-based listing system.
Twenty-five firms, spanning industries from microchips and biotechnology to artificial intelligence, kicked off trading on the board on July 22, with all of them notching gains of at least 100 percent by the end of the morning session that day.
On Thursday, August 8, two more companies made their debut on the new board, becoming the second batch of domestic tech firms to be listed there.
As of Friday, 151 companies had applied to raise funds on the Star Market board through initial public offerings.
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