On the evening of September 6th, Transsion Holdings announced that the company's financial officer, Xiao Yonghui, was suspected of illegal activities and received a "Notice of Detention" and "Notice of Investigation" issued by the Discipline Inspection and Supervision Commission of Zhen'an District, Dandong City, on the same day. He was taken into custody and an investigation was initiated.
Transsion Holdings stated that the company has made proper arrangements for the relevant work, and other directors, supervisors, and senior management are performing their duties normally. This matter will not have a significant impact on the company's normal operations. Up to now, there is no knowledge of the progress or conclusions of the investigation.
Known as the "King of Mobile Phones in Africa" in the market, Transsion Holdings is mainly engaged in the design, research and development, production, sales, and brand operation of smart terminals with mobile phones as the core. It owns three major brands: TECNO, iTel, and Infinix.
In the first half of this year, Transsion Holdings achieved a revenue of approximately 34.558 billion yuan, a year-on-year increase of about 38.1%, and a net profit of about 2.852 billion yuan, a year-on-year increase of about 35.7%. However, the net cash flow from operating activities in the first half of the year fell by 120% year-on-year, from 6.959 billion yuan in the same period of the previous year to -1.392 billion yuan. Transsion Holdings stated that this was due to a significant increase in cash paid for the purchase of goods and acceptance of services compared to the same period of the previous year. The main reason for the increase is that the company has a certain payment period for procurement, with a larger procurement payment due in the first half of 2024, resulting in a year-on-year increase in payments.
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According to data released by the market research institution Canalys, in the second quarter of 2024, Transsion's shipment volume was 255 million units, with a market share of 9%, ranking fifth globally; in the first quarter of 2024, Transsion's shipment volume was 286 million units, with a market share of 10%, ranking fourth globally. In the first half of the year, both shipment volume and market share have decreased quarter-on-quarter.
In terms of market share, in the first half of 2024, in the African market, the company's market share in the African smart phone market exceeded 40%, ranking first. In the South Asian market, it ranked first in the smart phone market share in Pakistan; first in Bangladesh; and seventh in India.
As part of the rapidly recovering consumer electronics sector and with the growth in performance in the first half of the year, Transsion Holdings has been favored by institutions and has also frequently accepted research recently.
In addition, the concept of the triple-folding screen phone has recently become very popular, and Transsion Holdings has also taken action. Recently, the company stated on the interactive platform that its brand TECNO has recently released the ultra-thin triple-fold concept phone PHANTOM ULTIMATE 2, which is a concept model.
Transsion Holdings also stated that the Christmas season in the second half of the year is a relatively important sales node overseas, and the company's new product launch events are relatively concentrated in September and October, leaving some time for channel promotion. In terms of functional selling points, different brands and series have different focuses, with gaming, multimedia and photography, AI, and folding being some of the more important directions.
It is worth noting that on July 12th of this year, foreign media reported that Qualcomm filed a lawsuit against Transsion in the Delhi High Court in India. Qualcomm claimed that Transsion recently signed a licensing agreement with Qualcomm for a portion of its products, but the vast majority of its products have not obtained Qualcomm's permission and are still infringing on its valuable patent portfolio.Transsion Holdings responded at that time, stating that the company had signed a 5G standard patent license agreement with Qualcomm and was fulfilling the agreement. Transsion's sales network spans over 70 emerging market countries in Africa, South Asia, and other regions. In these countries, some patent holders do not possess or only have a small number of patents, yet they demand licensing fees based on a global unified rate, which is excessively high and does not take into account the differences in economic development levels across various regions, their lack of patents or only a small number of patents in specific regions or markets, and the existence of precedents that provide different rates for different regions. "We believe that the practices of some patent holders do not fully adhere to the principles of fairness, reasonableness, and non-discrimination."
As of now, Transsion Holdings' stock price is 81.1 yuan per share, with a total market value of 91.6 billion yuan.
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