Zebra consumption Shen Tuo.
On December 27, Transsion Holdings (688036SH) released its performance forecast in advance, and it is expected to have an operating income of 621 in 2023about 2.2 billion yuan, a year-on-year increase of 3332%, and the net profit is expected to be about 549.3 billion yuan, a year-on-year increase of 12115% or so.
Many people don't know much about this Chinese mobile phone company. However, its brands Tecno, ITEL and Infinix play a pivotal role in markets such as Africa and are known as the "kings of Africa" in the mobile phone industry.
This year, the cold winter of the global smartphone market continues. According to Counterpoint Research's recent report**, global smartphone shipments in 2023 will be around 1.2 billion units, down 5% year-on-year and the lowest level in nearly a decade.
However, the burgeoning African smartphone market still maintained steady growth. According to data released by Canalys, in the third quarter of this year, 17.9 million smartphones were shipped in Africa, a year-on-year increase of 12%, becoming the world's fastest growing smartphone market.
Transsion Holdings is the biggest beneficiary of this market. From July to September, the company's shipments in the African market reached 8.6 million units, a year-on-year increase of 9%, and its market share in the African market reached 48%, which became a strong support for revenue growth and profitability improvement.
In recent years, Chinese mobile phone manufacturers such as Xiaomi and OPPO have increased the African market as an important growth point. In Q3 2023, the shipments of these two brands in Africa will be 1.9 million and 800,000 units respectively, a year-on-year increase of 100% and 259%, respectively, and the latest market share will be 11% and 4% respectively.
Driven by the African market, Transsion has become one of the world's mainstream mobile phone manufacturers. In the first half of 2023, the company's share of the global mobile phone market was 139%, ranking third;Among them, the market share of the global smartphone market is 76%, ranking sixth.
After graduating from Nanchang Hangkong University in 1996, Zhu Zhaojiang joined Bird Mobile Phone Company and became the sales champion of Bird in North China in just a few years. In 2003, Zhu Zhaojiang, who had a great record, was entrusted with the important task of expanding overseas markets.
However, at that time, the Bird mobile phone had gradually declined, and the deputy general manager Zhu Zhaojiang was powerless, so he came up with the idea of starting a business, and pulled his old team in the Bird period, Zhang Qi, Yan Meng, Ye Weiqiang and others, to found Transsion in 2006.
At that time, Lei Jun, who was proud of the spring breeze, was busy leading Jinshan to go public and create the first myth of his personal business history. The story of the establishment of Xiaomi is 4 years later.
At that time, China's mobile phone market was still the world of Nokia and Motorola, the king of feature phones, and the local mobile phone brand, "China Cool Union", was in the accumulation period.
Based on the work experience of Bird mobile phones, Zhu Zhaojiang believes that the competition of domestic feature phones has entered a white heat, and it is of little significance to devote himself to this red sea market. Therefore, he found another way to go directly to the sea and face the African blue ocean market that he is most familiar with.
In 2007, Transsion launched its first mobile phone, the Tecno T780, in Africa. This mobile phone, if it is placed in the Chinese mobile phone market at that time, can only be said to be lackluster. However, according to the characteristics of too many telecom operators in Africa and users usually holding multiple mobile phone cards, the Tecno T780 is equipped with a dual-SIM dual-standby function, which is an instant hit.
This strategy of placing great emphasis on localized operations has continued to the development of mobile phones after Transsion Holdings. Because of frequent power outages in Africa, the company has developed low-cost high-voltage fast charging technology and ultra-long standbyDeveloped a bass design and horn design suitable for Africa;Customize camera devices for dark-skinned users, and match them with camera algorithms, etc.
With the increase in the penetration rate of the African mobile phone market and the introduction of smartphones, Transsion Holdings has grown into a well-deserved king of the African mobile phone market.
After that, relying on China's consumer electronics industry, it will introduce technologies and applications such as 5G, folding screens, and AI into the African market, and continue to dig into the market value through high-end.
On the other hand, this strategy of localized operation will be replicated in other global sinking markets. At present, in addition to Africa, Transsion Holdings has topped the smartphone market in Pakistan and Bangladesh in South Asia, and ranks sixth in the smartphone market share in India.
The domestic mobile phone market has been fighting for several years, and a new generation of the four kings Huami OV was born. When they realized the stock crisis and had to go overseas, they found that Transsion Holdings, a "little-known" Shenzhen company, had already occupied several hills in the overseas market.
Transsion Holdings landed on the Science and Technology Innovation Board of the Shanghai Stock Exchange in 2019, becoming the first A-share mobile phone stock, and it is also the first share of Xiaomi Group (01810.).HK) is the only mainstream mobile phone listed company.
Transsion's development model is similar to that of mobile phone companies such as Xiaomi, hardware + software + Internet. However, compared with the competitive environment encountered by Xiaomi in its core markets of China, India and Europe, Transsion Holdings, which is deeply involved in the global sinking market, can obtain higher market feedback with lower investment.
Therefore, the product looks a little low "king of African mobile phones", the gross profit margin of mobile phones last year exceeded 20%, and this year is expected to further increase;In the same period, the gross profit margin of Xiaomi's mobile phone was only 9%, and the improvement this year is still far less than that of Transsion.
As the third runner-up in the global smartphone market, Xiaomi Group is several times larger than Transsion Holdings, but the latter is more profitable, with a net profit margin of more than 9% in the first three quarters of 2023, compared to 64%。
What's more, Xiaomi Group as a whole has fallen into a long-term scale bottleneck, while Transsion Holdings has maintained its growth trend in major markets such as Africa. From January to September this year, the revenue growth rate of the two was -76% and 194%。
If Transsion Holdings' dimensionality reduction and localized operation experience can continue to be replicated in other sinking markets around the world, it should open up more room for growth.
In addition, in contrast to Transsion Holdings' popularity in the African market, Xiaomi has encountered regulatory pressure in the Indian market, where it has made significant progress, and nearly 4 billion yuan has been seized. Recently, the interim CEO and CFO of vivo India was arrested by local authorities.
Disheartened, Xiaomi is trying to keep the mobile phone market through high-end, and then put more energy into the transformation to smart electric vehicles. In October this year, the company's strategy has been upgraded from "mobile phone AIoT" to "people, vehicles and home ecology".
In this major business change, Xiaomi's biggest competitor, Huawei, has built an alliance system with a number of automakers and has begun to reap the fruits of victory. Xiaomi, which is long overdue, even if it claims to invest $10 billion in 10 years, still seems to be alone. I am afraid that it is too late to envy Transsion Holdings, and can only "move forward".