Chinese budget smartphone maker that leads sales in Africa, Transsion Holdings, has received approval to go public on Shanghai’s new Nasdaq-style stock market, reported the South China Morning Post.
According to an announcement on the Shanghai Stock Exchange website on Tuesday, the company, which filed its initial public offering (IPO) application in March, aims to raise up to 3.01 billion yuan (US$437 million) on the Science and Technology Innovation Board. This is also known as the STAR board.
The Shangai based company was the first mobile phone company to establish a manufacturing base in Africa. Its low-cost handsets having enticed millions of new consumers in the developing world enabled it to become the biggest mobile phone supplier in Africa.
Transsion handset brands TECNO, Infinix, and Itel had a combined 58.7% share of the multi-feature phone market in Africa last year, according to research firm IDC.
In smartphones, the company led the continent last year with a 34.3% share, followed by Samsung Electronics with 22.6% and Huawei Technologies with 9.9%.
According to Transsion, the average price of its feature phones was 65.95 yuan (US$10) in 2018, while its smartphones cost about 5% the cost of Apple’s flagship iPhone XS model.
When its handset factory in Addis Ababa was launched in 2011, Transsion, which initially traded as Tecno Telecom with offices in Hong Kong, became the first mobile phone company to establish a manufacturing base in Africa. The firm also has factories in China, India, and Bangladesh, and employs more than 14,000 employees worldwide.
Transsion has been focused on bringing affordable smartphones and feature phones, as well as handsets with physical keypads and limited functionality, to developing economies since it was founded in 2006. That strategy enabled it to become the biggest mobile phone supplier in Africa.
Since most of its business is entrenched outside China, Transsion had to meet regulators’ scrutiny about its sustainability and profitability. The company received about 62 official queries from the Shanghai Stock Exchange in May, which resulted in it missing the first batch of firms to debut on the STAR board on Tuesday.
As they responded to queries, Transsion said it has gained deep insight and understanding of the African market and has high-level research and development programs dedicated to deciphering local market requirements in mobile photography and big data. Transsion aims to push forward China’s agenda, as the country expects to strengthen Sino-Africa relations.
It is now set to make up for lost time for its Star IPO. Transsion, which is touted as a successful Chinese tech company going abroad, aims to push forward the country’s agenda under the Belt and Road Initiative as well as Beijing’s directive for stronger China-Africa relations, according to the company’s prospectus.
The firm also said it will use the proceeds ($437 million) to fund six projects for the production and development of mobile phone and internet systems.
Transsion had planned to go public last March through a reverse takeover of Shimge Pump Industry Group on the Shenzhen Stock Exchange before applying to the list on the new board. But this plan was abandoned after Chinese President Xi Jinping proposed launching STAR last November.