The new exchange for tech stocks in China that has been recently launched is the aim for the Chinese budget smartphone maker Transsion, whose Tecno brand is a dominant force already in the African market.
It has already got the preliminary permission this week for listing of its shares at the Star Market, China’s answer to the Nasdaq, said the Shenzhen-based company. It now needs to get the green light from China’s top securities regulator, the Securities Regulatory Committee, to finally launch an initial public offering at the Star Market.
The company could be valued at $4 billion in the IPO. The added advantage is that the company would be listing itself ion an exchange that has had a tremendous launch just last week which improves the chances of the company at making a successful IPO.
The aim of establishing and launching the Star Market by China was to allow its domestic tech companies to find support within the country instead of seeking funds through IPOs in exchanges in Hong Kong or at the Nasdaq in the United States.
“China wants a rejuvenation of the nation through technology and innovation,” said Mark Huang, an analyst at Bright Smart Securities. “That’s why they launched the board”. The Star Market “surely hopes there could be a snowball effect”, he said but added that whether the larger tech companies of China would al;so get listed at the exchange is remains to be seen. “After all, the board is still in baby size and some rules are still at a trial stage,” Huang said.
There were no comments available from Transsion.
According to a prospectus of Transsion, the company, which was founded in 2006 by Chinese entrepreneur Zhu Zhaojiang, wants to raise about 30 billion yuan or $436 million from the public listing and make use of the funds to construct smartphone manufacturing units and research and development centers in Chongqing, Shanghai and in Shenzhen, both in China.
The company wants to make available to the investors at least 80 million shares even though the exact details have not yet been worked out by it, said reports. Analysts believe that the company would be able to attain a valuation of at least 30 billion yuan or $4.4 billion from the IPO launch.
The owner of Itel and Infinix phones, Transsion does no business in China itself despite having its roots there. It positions itself as an African company in the African market.
According to IDC figures, almost half o eth African smartphone market share is owned by Transsion and lags companies such as Samsung, Huawei and Apple behind it. In another important and growing smartphone market – India, the company is already the fourth largest vendor with about 7 per cent market share.
The company generated revenue of 22.65 billion yuan or $3.3 billion in revenue in 2018 from sale of 124 million smartphones phones globally.
The company has made it successful in Africa because of certain innovations. One very popular feature is nighttime photography settings that have been created to adjust to darker skin tones for its customers in Africa. Another leverage of the company in the African market is the price strategy with its starting price for sells phones without smart features is as low as $9. Last year, almost 60 million Itel phones were sold by the company at that low price. In the same period about 30 million Tecno phones priced at nearly $11 each was sold by it.
(Adapted form CNN.com)