Transsion Holdings, the largest mobile phone vendor in Africa, priced its initial public offering (IPO) on Monday at RMB 35.15 (around $4.93) per share to raise RMB 2.8 billion on China’s Nasdaq-style tech board.

Share prices for the Chinese smartphone maker opened 50.7% higher at RMB 53, valuing the company at RMB 42.4 billion (around $5.95 billion).

Why it matters: The Shenzhen-based budget mobile phone seller has a strong presence in emerging markets such as Africa and India, but has been criticized for its weak research and development capabilities.

  • The average selling price for Transsion smartphones was around $69 in 2018, and feature phones were priced as low as $9.8, according to the company’s prospectus.
  • The company only spent 3.1% of revenue on research and development in 2018, according to company documents.
  • Chinese telecom company Huawei sued Transsion just a week before it went public alleging intellectual property infringement.

Details: The Huawei lawsuit has had limited impact on Transsion’s performance in the market. Its share price peaked at RMB 69 per share on Monday morning, and closed 64.4% higher than its IPO pricing at RMB 57.8 for a market capitalization of RMB 46.2 billion.

  • The lawsuit, which was filed September 23 to the Shenzhen Intermediate People’s Court, shows Huawei was claiming RMB 20 million from Transsion Holdings and five of its subsidiaries.
  • Zhu Zhaojiang, chairman of Transsion, told Chinese media Yicai on Monday that he believes “the law will bring a fair response” (our translation).

Context: Transsion Holdings was founded in 2006 by former employees of Ningbo Bird Company, which was once one of the biggest mobile phone makers in China.

  • The company, which owns three phone brands—Tecno, Itel, and Infinix—held a combined 48.7% share of the mobile phone market in Africa last year, according to its prospectus, citing data from research firm IDC.

Wei Sheng

Writing about semiconductors and telecommunications.

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