African Mobile Phone Leader Seeks Capital on Hong Kong Stock Exchange.

On the evening of November 12, Transsion Holdings unveiled its intention to issue overseas shares (H-shares) and seek a listing on the main board of the Hong Kong Stock Exchange.

Recently, Transsion published its third-quarter financial report, revealing a near-halving of profits. In the first three quarters of 2025, Transsion Holdings recorded an operating revenue of 49.543 billion yuan, a 3.33% year-on-year decrease; its net profit attributable to shareholders stood at 2.148 billion yuan, marking a 44.97% year-on-year decline.

It's noteworthy that in the first quarter of this year, global smartphone shipments did not decrease but instead rose by 1.5 percentage points. Several months ago, Transsion's annual shipments surpassed 200 million units, five times those of Huawei, firmly placing it among the top three globally.

In the global mobile phone market, it commanded a 14% market share, and in its core market of Africa, the market share neared 50%. At its zenith, Transsion, alongside Huawei and BYD, was featured on Time magazine's list of the '2024 Top 100 Most Influential Companies in the World.'

The net worth of Transsion's founder, Zhu Zhaojiang, exceeded 16 billion yuan, making him China's most under-the-radar mobile phone mogul.

At this juncture, most people had never even heard his name. However, just as the excitement subsided, Transsion's first-quarter report dealt a blow to the onlookers.

Why did the situation take a sudden turn?

Transsion's downturn is intricately linked to its business model. Speaking of the business model, one must delve into Zhu Zhaojiang's background.

This post-1970s individual, hailing from Ningbo, has exhibited a strong sales acumen since childhood. Whether it was candies, beverages, watches, or radios, he could find ways to sell anything profitable. After graduating from university, Zhu Zhaojiang joined Bird Mobile Phones, starting as a junior salesperson and eventually ascending to the head of overseas business.

During this tenure, he traversed over 90 countries worldwide and uncovered a significant business opportunity: 'Africa, with a population exceeding 1 billion, had a mere 6% mobile phone penetration rate.' Zhu Zhaojiang promptly drafted a research report for headquarters, advocating for expansion into the African market. However, a response of 'wait and see' left him rebuffed.

Unable to tolerate the missed opportunity, he departed from Bird in 2006 and founded Transsion. This sales maestro began leading his team to deeply understand the pain points of African users. He discovered that Africa was home to numerous telecom operators with limited coverage and inconvenient charging options. Thus, he directed his team to develop targeted features like triple SIM triple standby, quad SIM quad standby, and 20-day ultra-long standby. With one phone, users could avoid being out of touch.

When Africans took photos at night, everything appeared pitch black. He directed his team to develop deep-skin-tone imaging technology, paired with subwoofers and headphones, enabling photography-loving and dancing-loving Africans to shine brightly at night.

Most crucially, the prices were truly enticing!

Based on 2023 data, with nearly 200 million phones sold, the profit was just over 5.5 billion yuan, averaging less than 30 yuan per phone, underscoring its cost-effectiveness.

Furthermore, Zhu Zhaojiang introduced the 'rural surround urban' marketing strategy to Africa. In every village and town there, Transsion stores were ubiquitous. As long as there was a wall, there would be 'Transsion, illuminating your beauty'... You might even witness an entire building painted in the iconic 'Transsion blue.' It was nothing short of relentless branding.

Success in Africa provided Transsion with the ammunition to replicate its African model in the Middle East, South Asia, Latin America, and beyond. However, when these markets caught the attention of other 'predators,' Transsion's days of feasting alone came to an end. Especially in the fourth quarter, Xiaomi, realme, and OPPO all witnessed significant growth in Africa, with realme's growth nearing 70%. Throughout the year, although Transsion still ranked high due to its early growth, its revenue had actually started to decline in the third and fourth quarters.

To compound matters, in July 2024, Qualcomm, Philips, and Nokia filed patent infringement lawsuits against Transsion in multiple locations in India and Europe, demanding that Transsion pay relevant patent fees. Meanwhile, escalating costs in areas such as system-level chips (SoCs) also squeezed Transsion's already thin profit margins.

In 2023, Transsion's gross profit margin stood at 24.45%, but by the first three quarters of 2025, it had plummeted to 19.47%. The market is ever-evolving, and a company cannot rely on a single strategy indefinitely. Transsion indeed needs to find new avenues for growth.

Disclaimer

The content in this article concerning listed companies is based on the author's personal analysis and judgment of information publicly disclosed by the listed companies in accordance with their legal obligations (including but not limited to interim announcements, regular reports, and official interaction platforms); the information or opinions in the article do not constitute any investment or other business advice, and Market Value Observer does not assume any responsibility for any actions taken as a result of this article.

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