On December 27, Chuanyin Holdings (688036.SH) issued a forecast of pre-increase in performance. It is expected to achieve operating income of 62.122 billion yuan in 2023, a year-on-year increase of about 33.32; net profit attributable to the parent was about 5.493 billion yuan, a year-on-year increase of about 121.15%; non-net profit was about 5.01 billion yuan, a year-on-year increase of about 126.73%.

as for the reasons for the changes in the performance of the current period, Chuanyin Holdings said that the main reason is that the company continues to develop emerging markets and promote product upgrading, resulting in an increase in overall shipments and sales revenue; at the same time, benefiting from the upgrading of product structure and cost optimization, the overall gross profit margin has increased, and the corresponding gross profit has increased.

On the same day, the company announced that, in accordance with the relevant provisions of the "Shanghai Stock Exchange Science and Technology Innovation Board Stock Market-making Business Implementation Rules", China Galaxy Securities Co., Ltd. (hereinafter referred to as "Galaxy Securities") filed an application, since December 2023 From the 28th, Galaxy Securities will carry out market-making trading business on the Science and Technology Innovation Board Stock Voice Holdings.

In this regard, financial writer You Xi told a reporter from China Times that market-making transactions can help increase stock trading activity, improve market liquidity, improve market pricing efficiency, reduce transaction costs, and improve market information about the company., To increase the attention of the company's stock in the market.

However, Yu Fenghui, an expert and economist at the Top 100 Research Center of Hong Kong stocks, told our reporter that the services of market merchants are usually not free, which will increase the transaction costs of investors.

Pre-increase in 2023 performance

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. The main products are TECNO, itel and Infinix three brands of mobile phones, including functional machines and smart machines.

On December 22, according to the forecast of global smartphone shipments in the "Smartphone 360 Report" Research by market analysis agency Counterpoint, global smartphone shipments in 2023 will drop 5% year-on-year to 1.2 billion units, the lowest level in nearly a decade.

However, according to the announcement of Chuanyin Holdings, according to preliminary calculations by the company's financial department, the company expects to achieve operating income of about 62.122 billion yuan in 2023, an increase of about 15.526 billion yuan over the same period last year; it is expected to achieve net profit of about 5.493 billion yuan in 2023. An increase of about 3.009 billion yuan over the same period last year; it is expected to achieve non-net profit of about 5.01 billion yuan, an increase of about 2.8 billion yuan over the same period last year. This performance forecast data has not been audited by a certified public accountant.

as for the reasons for the changes in the performance of the current period, Chuanyin Holdings said that the main reason is that the company continues to develop emerging markets and promote product upgrading, resulting in an increase in overall shipments and sales revenue; at the same time, benefiting from the upgrading of product structure and cost optimization, the overall gross profit margin has increased, and the corresponding gross profit has increased.

At the same time, according to the third quarterly report of Chuanyin Holdings in 2023, the company achieved revenue of 43.022 billion yuan in the first three quarters, an increase of 19.20 percent over the same period last year; net profit of 3.884 billion yuan, an increase of 72.01 percent over the same period last year; and non-net profit of 3.509 billion yuan, an increase of 72.46 percent over the same period last year.

Why can Transsion Holdings still achieve performance growth despite the global smartphone market downturn? In Yu Fenghui's view, "Transsion Holdings has significant advantages in strategic positioning and execution. On the one hand, Transsion Holdings focuses on emerging markets such as Africa and has huge growth potential. On the other hand, the company has a deep understanding of target market needs and provides highly customized products. And services, such as dark skin photography technology, etc., in addition, the company has also carried out effective supply chain management and cost control, and invested in R & D and marketing, to stay ahead of the competition."

In terms of emerging markets, Transsion Holdings mentioned in its previous financial report, "The company's sales areas are mainly concentrated in Africa, South Asia, Southeast Asia, the Middle East and Latin America and other global emerging market countries. The population base of these emerging markets exceeds 4 billion. Some countries have a low level of economic development, the development of the mobile phone industry is relatively lagging, the per capita mobile phone ownership is small, and the market space is large. At the same time, with the continuous development of emerging markets, the proportion of smart phones will continue to increase, and there is a large demand for structural improvement."

In this regard, on December 19, the market research organization Canalys issued a document stating that in the third quarter of 2023, smartphones in Africa achieved a strong recovery for two consecutive quarters. Despite a challenging macroeconomic environment, increased import restrictions, and volatile exchange rates in several key markets, smartphone shipments in the region increased by 12% year-on-year to 17.9 million. Among them, Transsion Holdings maintained its leading position, up 9% year-on-year, firmly grasping 48% of the market share.

Galaxy Securities conducts market-making transactions on it

On the same day, the Company issued an announcement on the market-making business of Galaxy Securities on the Company's shares.

"Transsion Holdings' stable performance, good market prospects, and compliance with the relevant provisions of the implementation rules for the market-making trading business of CRE shares may be the reasons why its shares were selected for market-making trading by Galaxy Securities." expressed by Xi.

Yu Fenghui, on the other hand, believes that if a stock has a small trading volume or a large gap between bid and ask prices, the exchange or regulatory agency may require the stock to conduct market-making transactions to improve its liquidity; smaller, emerging or less well-known company stocks are more likely to be selected for market-making transactions because they need market makers to provide market liquidity; certain exchanges or regulators may have specific rules or policies that require certain types of stocks to be traded in a market.

According to Yu Fenghui, market-making is a form of securities trading in which market makers (usually financial institutions) act as intermediaries between buyers and sellers, providing a continuous bid and ask price for a particular stock, thereby increasing market liquidity.

In Yuxi's view, the selection of Transsion Holdings as a market-making stock is positive for its market performance and long-term development. Supported by good performance, the company is expected to stand out in the CRE market and bring value to investors.

"Market-making trading helps to increase the trading activity of stocks, improve market liquidity, improve market pricing efficiency, reduce transaction costs, enhance the market's information about the company, and increase the attention of the company's stock in the market." He stated.

However, Yu Fenghui also reminded our reporter that although market making can improve liquidity, the services of market makers are usually not free, and they may make profits through bid-ask spreads, which will increase the transaction costs of investors.