Transsion Holdings, the Chinese budget smartphone maker that leads sales in Africa, has received approval to go public on Shanghai’s new Nasdaq-style stock market, as the company’s low-cost handsets entice millions of new consumers in the developing world.
The Shenzhen-based 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, also known as the Starboard, according to an announcement on the Shanghai Stock Exchange website on Tuesday.
As part of that process, the Star board’s listing committee asked Transsion to submit further information about the competitiveness of its core technologies, both at home and abroad, and its other technical advantages, the announcement said.
A Transsion spokeswoman said the company had no comment at present.
The company 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
With its business entrenched outside China, Transsion had to meet regulators’ scrutiny about its sustainability and profitability. Transmission received about 62 official queries from the Shanghai Stock Exchange in May, which resulted in the company missing the cut for the first batch of firms to debut on the Star board on Tuesday.
It is now set to make up for a lost time after getting the go-ahead for its Star IPO. Transsion considers itself a model for a “Chinese tech company going abroad”, as it aims to push forward the country’s agenda under the Belt & Road Initiative as well as Beijing’s directive for stronger China-Africa relations, according to the firm’s prospectus.
Responding to queries, Transsion said it has gained “deep insight and understanding of the African market”, and has “high-level research and development” to local market requirements in mobile photography and big data.
Transsion handset brands Tecno, Infinix, and Itel had a combined 58.7 percent share of the still vast 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 percent share, followed by Samsung Electronics with 22.6 percent and Huawei Technologies with 9.9 percent.
The average price of its feature phones was 65.95 yuan (US$10) in 2018, while its smartphones cost 454.38 yuan on average – about 5 percent the cost of Apple’s flagship iPhone XS model, according to Transsion.
The company, which initially traded as Tecno Telecom with offices in Hong Kong, became the first mobile phone company to establish a manufacturing base in Africa when its handset factory in Addis Ababa, the capital of Ethiopia, was launched in 2011.
The firm, which employs more than 14,000 employees worldwide, also has factories in China, India, and Bangladesh.
To be sure, other small Chinese brands are eyeing opportunities in Africa. Budget handset maker Simi Mobile, also based in Shenzhen, recently announced a new factory in Namanve, Uganda’s flagship industrial estate, to assemble mobile phones and laptop computers.
Simi’s nearly two-dozen feature phone handsets are priced between US$10 to US$20, while its smartphones are mostly sold below US$50.
These are already on sale in Ethiopia, Uganda, Cameroon, and will soon be available in more African countries, Simi chief executive Ares Chow Yuqing said in a recent interview.