China Mobile Phone Brand Transsion’s Luck is Disappearing

Consumer Staples Author: Yifei Liu Aug 26, 2022 04:34 PM (GMT+8)

Nowadays, it is difficult for Transsion to increase revenue and profit, and the crisis has been approaching step by step.

mobile phone

The interim report shows that operating income of Transsion (688036:SH) is CNY 23.109 billion (USD 33.37 billion), attributable net profit is CNY 1.654 billion, an increase of 1.12% and -4.53%, respectively, deductible net profit declines by 7.33%.

The company explained that the decline in performance was due to increased R&D expenses and the impact of non-recurring gains and losses. Moreover, it admitted that there was a decline in overall smartphone sales in the African and South Asian markets due to the unfavorable external environment.

Weak demand in the African smartphone market has dragged the company down recently. This led to the increasing scale of the company's inventory, which was approaching 10 billion at the end of H1 2022, accounting for 29.28% of the company's total assets.

Transsion is a household name in the African market. Ten years ago, the African continent was still in the era of feature phones, and Transsion's waveguide cell phones entered this emerging market. Over the past few years, Transsion has become a benchmark for Chinese companies going abroad, attracting many cell phone brands to expand into the African market, competition in the African cell phone consumer market has long been white-hot. 

In addition to cell phone products, the company began to expand in the hardware sector, creating digital accessory brands and home appliance brands. Like the initial entry into the African cell phone market, these products focus on high cost performance and low price to expand the market.

This company's competitors include Xiaomi, OPPO and vivo.