As the COVID-19 pandemic cases reach over 1 million in the African continent, the Chinese handset vendor Transsion's business seems relatively unaffected. The company delivered encouraging financial results for the first half of 2020.
Lockdown policies boosted handset demand? Image credit: Transsion
On August 26, the Chinese handset maker Transsion (688036:SH), which is focused on Africa and other emerging markets, announced its interim financial results for 2020. Growing by 31.81% year-on-year, the company's revenue reached nearly CNY 13.85 billion. The net profit also increased by 33.42%, amounting to CNY 1.09 billion.
Despite the revenue and profit growth, the company recorded negative cash flow generated from operating at CNY -457.77 million, presenting a 154% year-over-year decline. The company's management provided the explanation of the cash flow decline, stating the prepayment increased drastically for stocking up key components and the finished product inventory went up also for the growing demand for phones.
Though the pandemic affected the local production and consumption, the corresponding lockdown policies have driven the demand for remote communication devices sharply, and consequently, the mobile phone demand increased. According to IDC, in the African market, Transsion brands (Tecno, Itel, and Infinix) continued to lead the smartphone market in Q2 2020 with a unit share of 45.2%. Samsung and Huawei followed with respective unit shares of 19.0% and 8.8%.