21st century business herald reporter Lin Dianchi Zhang Sai male intern Yang Weiwan Shenzhen report

On February 22, Transsion Holdings (688036.SH) announced its performance bulletin, with annual revenue of 62.392 billion yuan, a year-on-year increase of 33.9; net profit attributable to the parent reached 5.502 billion yuan, a year-on-year increase of 121.55.

according to the comprehensive announcement, the overall performance growth of transmission holdings in 2023 benefited from the upgrading of product structure and cost optimization, and the overall shipment volume of the company increased and the gross profit margin increased. Among them, the development of emerging markets has achieved results.

In 2023, the global mobile phone market continued to be sluggish, and the mobile phone market was also quietly shuffling in turmoil. Apple surpassed Samsung to reach the top. With the development of emerging markets, Transsion Holdings quietly ranked among the top five and achieved 30.8 per cent growth.

There are signs that the mobile phone market recovery is developing. IDC data shows that in the fourth quarter of 2023, the global smartphone market grew by 8.5 year-on-year, and shipments reached 0.3261 billion units, a higher-than-expected growth rate.

Among them, Transmission Holdings shipped 28.2 million smartphones in the fourth quarter, an increase of 68.6 percent over the same period last year, jumping to fourth in the world for the first time.

The ups and downs of "King of Africa"

In 2023, although the overall global mobile phone market continued to decline and created the lowest annual shipments in the past ten years, emerging countries have bucked the trend, including the African market, which is ignored by most mobile phone manufacturers.

Unlike many high-end mobile phone manufacturers, since its inception, Transmission Holdings has focused on Africa, where mobile phone penetration is extremely low.

Before and after the listing in 2019, the African market contributed more than 70% of Transmission Holdings's revenue. According to IDC statistics, the market share of Transsion Holdings in Africa reached 52.5 percent in 2019, with the share of smartphones in the African market increasing from 34.3 percent in 2018 to 36.9 percent in 2019.

For the next three years, Transsion Holdings has been holding more than 40% of the African market. However, it is not difficult to find that the growth of transmission holdings in the African market seems to have met the ceiling.

Especially in 2022, the revenue contributed by Transsion Holdings in the African market is 20.633 billion yuan, which is the lowest year in these three years, and it will be 24.238 billion yuan and 22.452 billion yuan in 2021 and 2020 respectively.

the decline in the African market also dragged down the overall performance of transmission holdings. in 2022, the company's revenue and net profit were both negative growth, and the net profit attributable to the parent fell to 2.484 billion yuan.

However, Transmission Holdings is still optimistic about the African market. According to GSMA data, as of 2020, the penetration rate of smart machines in sub-Saharan Africa is only 48%. However, this proportion is expected to grow to 64% by 2025, and there is still room for growth in the African market.

Transsion Holdings said in a survey that at present, emerging market countries are still in the market development trend of "switching from functional machines to smart machines". On the whole, the penetration rate of smart machines in emerging market countries is relatively low compared with that in North America, Western Europe, mature Asia-Pacific developed economies and China, and functional machine for smart machines is still an important factor driving the growth of smart machine market in emerging markets.

The decline will improve by 2023. According to Canalys data, in the third quarter of last year, the market share of Transsion Holdings in Africa has reached 48%, and the shipment volume has achieved a year-on-year growth of 40%, with an annual growth rate of 9%. The market share is far higher than that of Samsung (26%) and Xiaomi (11%) in third place.

it is worth noting that Xiaomi and OPPO, which rank behind transmission holdings, are struggling to catch up with the gap between transmission holdings. in 2023, mobile phone shipments in Africa will grow by 100 and 259 respectively. transmission holdings may face more challenges in Africa.

Diverse exploration

Despite the title of "King of Africa", Transsion Holdings is not trapped by Africa, but is opening up more emerging markets.

In 2023, Transsion Holdings will increase its efforts in South Asia, Southeast Asia, the Middle East and Latin America. This is because the level of economic development in some countries is low, the development of the mobile phone industry is relatively lagging, the per capita mobile phone ownership is small, and the market space is large. 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.

Diversified layout and risk diversification have allowed Transsion Holdings to reap results. According to IDC data, Transsion Holdings shipped 94.9 million mobile phones in 2023, ranking among the top five in the global mobile phone market for the first time, up 30.8 percent year-on-year, and its market share reached 8.1 percent.

"King of Africa" has become one of the world's top five mobile phone providers. IDC data shows that the top four shipments are Apple, Samsung, Xiaomi and OPPO.

Nabila Popal, research director of IDC's global tracking team, said that although Android manufacturers such as Chuanyin Holdings and Xiaomi achieved strong growth in the second half of 2023 due to the rapid growth of emerging markets, the biggest winner is still Apple. Apple's success is largely due to the growth of high-end devices, which currently account for more than 20% of the market.

According to IDC data, in the third quarter of 2023, Transsion Holdings ranked first in smartphone shipments in Africa, Pakistan, Bangladesh, and the Philippines.

After acquiring a large number of mobile phone users, Transsion Holdings is trying to replicate the development of China's mobile Internet era and split more business.

for example, transmission holding has developed its own operating system based on Android. its three major mobile phone brands are equipped with HiOS, itelOS and XOS respectively, and drain the software developed by transmission holding, such as Boomplay and Scooper.

there are media reports that transmission holdings has obtained the relevant Internet banking license in Africa, can realize the scan code payment and other functions, as well as engaged in similar balance treasure, flowers and borrowing and other businesses.

with the continuous development of AI technology, smart phones, as the ultimate entrance to AI interaction, are expected to be upgraded from smart phones to AI phones in the future. Transmitter Holding also has some layout in related aspects. In May 2023, it released a smart phone with access to OpenAI and an AI assistant to realize ChatGPT text interaction. According to the company's disclosure, its full-scene intelligent platform construction, vertical field multi-modal perception and interaction technology research and other AI projects are in the development and verification stage.