Net profits for Transsion, the Chinese smartphone maker, in the first three quarters of the year surged 732% year on year to RMB 1.3 billion (around $180 million), according to the company’s filing, while revenues continued to slow.

Why it matters: This is the first quarterly earnings report released by the Shenzhen-based budget mobile phone seller since its listing on China’s tech-focused STAR Market in September.

  • The surge in profit, however, was not driven by a corresponding surge in revenues, which rose a modest 6.7% year on year.
  • The company profited from foreign currency futures purchased during the first five months of 2018 to hedge against the rapid devaluation of US dollars against the Chinese yuan.

Details: Revenue growth during the three quarters ended Sept. 30 is slowing for the mobile phone maker, down significantly from 12.9% in 2018 and 72.2% in 2017, according to its prospectus filed in April.

  • The company sold 16.6 million smartphones and 38.2 million function phones in the first two quarters, according to the filings.
  • Revenue for the third quarter was RMB 6.4 billion, up 9.7% year on year, while net profit grew 436.7% on an annual basis to RMB 483 million.

Transsion’s lead in African phone market under threat from fellow Chinese rivals

Context: Founded in 2016, the company went public on the STAR Market on the Shanghai Stock Exchange last month, raising RMB 2.8 billion.

  • 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.
  • Transsion has been ceding market share in Africa to peers including Samsung and Huawei.
  • The company has a strong presence in other emerging markets such as India, but analysts have said its handset profit margins are significantly lower than those of premium smartphone makers.

Wei Sheng

Wei Sheng is a Beijing-based reporter covering hardware, smartphone, and telecommunications, along with regulations and policies related to the China tech scene. Before joining TechNode, he wrote about...

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