TRANSSION is becoming more and more "Xiaomi"

The "A+H" track is welcoming more consumer electronics companies.

On December 2, TRANSSION Holdings (688036.SH) and Anker Innovations (300866.SZ) both submitted their IPO prospectuses to the Hong Kong Stock Exchange.

In contrast to Anker Innovations' booming performance, TRANSSION Holdings is making its push into the Hong Kong market against a backdrop of nearly halved net profits.

In the first three quarters of 2025, TRANSSION Holdings reported revenues and net profits attributable to shareholders of 49.543 billion yuan and 2.148 billion yuan, respectively, representing year-on-year declines of 3.33% and 44.97%.

Behind this is the challenge to TRANSSION Holdings' "King of Africa" status from Chinese manufacturers Xiaomi and Honor.

Perhaps competitors are sometimes the best teachers; TRANSSION Holdings has also started to learn from Xiaomi, focusing on AIoT and car manufacturing to explore markets beyond smartphones.

On one hand, TRANSSION Holdings is building a "mobile phone +" AIoT smart ecosystem, launching various smart terminals such as home appliances, computers, and smart glasses, penetrating multiple scenarios in the lives and work of African consumers;

On the other hand, TRANSSION Holdings has also launched two-wheeled and three-wheeled electric vehicles in the African market to capture the motorcycle market.

But it is clear that more time is needed to see results.

Home Base Under Siege

This IPO marks TRANSSION Holdings' first equity financing since its listing on the STAR Market in 2019.

However, after six years, the fundamentals facing TRANSSION Holdings have changed significantly.

Before its first attempt at an A-share IPO, TRANSSION Holdings' revenue surged from 11.637 billion yuan in 2016 to 22.646 billion yuan in 2018.

Yet, the situation facing this IPO is one of declining performance, with TRANSSION Holdings' revenue and net profits attributable to shareholders dropping by 3.33% and 44.97% year-on-year in the first three quarters of 2025.

Behind this is the siege faced by TRANSSION Holdings' home base in Africa from Chinese companies.

Despite TRANSSION Holdings' mobile phone shipments in Africa exceeding 10 million units in the third quarter of 2025, maintaining a market share of 51% and holding the top position, the year-on-year growth rate is only 25%.

In contrast, Xiaomi and Honor are continuously ramping up their efforts; although their market shares in Africa are lower than TRANSSION Holdings', their year-on-year growth rates in the first three quarters of 2025 reached 34% and 158%, respectively.

According to third-party agency Omdia, Xiaomi plans to enter more than 15 new markets in the coming months, focusing on markets priced below $150; Honor is maintaining steady growth in the South African market, further increasing its market share with cost-effective models like the Honor 200 Lite.

The localization levels of companies like Xiaomi in Africa are not inferior to that of TRANSSION.

In response to the insufficient electricity and data flow in Nigeria, Xiaomi launched the REDMI 15C smartphone this year, equipped with a 6000mAh battery to enhance battery life and charging efficiency; Xiaomi has also partnered with Nigeria's comprehensive telecommunications operator MTN to bundle MTN SIM cards with the REDMI 15C, offering a 50% data reward for purchasing data packages with the MTN SIM card and REDMI 15C within six months At the same time, the recent surge in storage prices has put pressure on TRANSSION's cost control to some extent. The gross profit margin in the third quarter of 2025 was only 18.59%, marking the lowest quarterly value in five years.

In response, TRANSSION acknowledged that it would actively take corresponding measures to cope with changes in upstream costs and market competition, such as price increases and product structure adjustments.

The initiation of an IPO for financing in the Hong Kong stock market will, to some extent, provide TRANSSION with more ammunition to deal with pressures from supply chain price increases and market competition.

Beyond the purpose of financing, this push into the Hong Kong market is expected to enhance TRANSSION's visibility in the Southeast Asian market.

Compared to the African market, TRANSSION's position in Southeast Asia is not stable.

In the second quarter of this year, TRANSSION surpassed Samsung with a shipment of 4.5 million smartphones, ranking first. However, just one quarter later, Samsung quickly closed the gap with TRANSSION, with both holding a market share of 18%, jointly ranking first.

In the third quarter of the same year, Xiaomi closely followed, with a Southeast Asian market share just 1 percentage point behind TRANSSION, poised to catch up at any moment.

The challenge also lies in the relatively limited gross profit margin in markets outside Africa. In 2024, TRANSSION's gross profit margin in Asia and other regions was 17.66%, more than 10 percentage points lower than in Africa.

"The company plans to issue H-shares and list on the main board of the Hong Kong Stock Exchange to further enhance the company's overall competitiveness, improve the company's international brand image, and better utilize international capital markets to diversify financing channels," TRANSSION stated.

However, under weak fundamentals, TRANSSION's Hong Kong IPO may face valuation challenges.

Since the end of 2024, TRANSSION's maximum drawdown has exceeded 50%, with its market value evaporating by more than 30%.

"AIoT + Car Manufacturing" Dual Approach

TRANSSION's layout is increasingly reminiscent of Xiaomi.

In the African market, TRANSSION is expanding its product categories from smartphones to digital accessories and home appliances, launching sub-brands such as Oraimo and Syinix to build an AIoT smart ecosystem.

Oraimo products include TWS Bluetooth earphones, smartwatches, Bluetooth speakers, power banks, and vacuum cleaners; Syinix, which targets the mid-to-high-end home appliance market, mainly offers products such as smart TVs, air conditioners, refrigerators, freezers, washing machines, and microwaves.

Recently, TRANSSION also launched the AI PC—MEGABOOK S16 laptop and the TECNO AI Glasses smart glasses series.

In this way, TRANSSION effectively uses smartphones as the core control entry point, connecting various hardware to serve the office and daily life scenarios of African consumers.

This approach is fundamentally similar to Xiaomi's strategy of transitioning from smartphones to building an AIoT smart ecosystem. In the first half of 2025, Xiaomi's "Smartphone × AIoT" segment revenue was 187.4 billion yuan, a year-on-year increase of 18.6%.

TRANSSION is also targeting the transportation business, launching the two-wheeled electric vehicle brand Revoo in Africa, covering various scenarios such as daily commuting and food delivery, aimed at individual users. For example, the A series features a 1000W motor and a 60V21Ah battery, providing a range of 70 kilometers and a maximum speed of 45 kilometers per hour, suitable for daily short-distance commuting, with a charging time of 5-7 hours; TRANSSION has launched the electric vehicle brand TankVolt in Uganda, aimed at small business operators with passenger and freight transport needs. It mainly sells swappable electric two-wheelers and electric three-wheelers, and provides charging stations, battery swapping stations, and battery rental services. The market has expanded to countries such as Nigeria, Kenya, and Tanzania.

This indeed has great prospects locally, with market institutions predicting that the scale of electric motorcycles in Africa will grow from USD 17 billion in 2025 to USD 28.3 billion in 2030.

This has attracted more entrants, such as Zeno, a global electric transportation company founded by former Tesla executive Michael Spencer, which is actively expanding in the African markets of Kenya and Uganda.

However, unlike the Chinese market, the insufficient power supply in Africa may limit the construction of the AIoT smart ecosystem and the popularization of electric vehicles, posing challenges to TRANSSION's approach.

For example, while laying out local electric vehicles, there is also a need for supporting infrastructure such as charging stations, which may require a significant investment from TRANSSION.

Whether TRANSSION can create a "TRANSSION version of SU7" in the African market is under scrutiny