A few days ago, Africa-focused smartphone manufacturer, Transsion Holdings — makers of the Tecno, Infinix, and Itel brands — finally listed on Shanghai’s STAR market, China’s newly-established stock market specifically for tech companies.
Speculations for an impending Initial Public Offering (IPO) initially slated for the Shenzen Stock Exchange (SSE), began a year ago before the company confirmed earlier in August that it would be listing on the recently opened Shanghai STAR Market.
The company, headquartered in Shenzen, issued 80 million A-shares at an opening price of ¥35.15 (≈ $5 or ₦1800), raising ¥2.8 billion (≈ $392 million or ₦142 billion) in the process and increasing its valuation to $3.95 billion (₦1.4 trillion).
On its first day of trading, the company’s valuation reportedly rose initially by 96% to ¥55 billion (≈ $7.7 billion or ₦2.8 trillion) but closed with a valuation of ¥46.24 billion ($6.48 billion or ₦2.34 trillion).
By issuing A-shares — common shares issued by mainland Chinese companies normally available only to its mainland citizens — the purchase of its shares by foreign investors will be limited, and can only be done with a special licence issued through the country’s Qualified Foreign Institutional Investor (QFII) system.
Transsion joins Jumia — who publicly-listed five months ago on the New York Stock Exchange (NYSE) — as one of the companies with an African-focused market, holding its IPO entirely outside the continent.
Interestingly, research by the International Data Corporation (IDC), shows that Transsion Holdings accounts for roughly 46% of the mobile phone market — both smartphones and feature phones — in Africa and has reportedly never sold a single phone in its home country.
The makers of Tecno, Itel, and Infinix earlier promised to use the funds from their IPO for research, development, and for building phone assembly hubs in African and other emerging markets.
With the resounding success of their IPO, they might finally make good on this promise.