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

Wei Sheng is TechNode's feature editor. You can contact him at shengwei [at] technode [dot] com.

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