"King of Africa" Transsion's Darkest Hour: Breakthrough Amid Profit Halves and the Storm of Selling Off

For Transsion, 2026 will be an extremely critical year. Can it truly make money while maintaining sales volume? If not, will the capital market continue to support its “Africa story”? A big question mark looms.

On March 28th, the listed company on the STAR Market, Transsion Holdings (688036.SH), delivered a performance report that sent a chill through the capital market.

Known as the “King of Mobile Phones in Africa,” this giant sold approximately 169 million phones in 2025, with a global market share of 12.3%, ranking third worldwide. However, its financial data showed a stark contrast—“revenue growth without profit growth,” or even “blood loss.” The annual report indicated that the company achieved an operating revenue of 65.59B yuan, down 4.55% year-over-year; net profit attributable to shareholders was only 2.58B yuan, a sharp decline of 53.49%, with profits halved.

Notably, as of the latest data, Transsion Holdings (688036) stock price was about 53 yuan per share, with a total market value of roughly 61 billion yuan—down from nearly 199.2 billion yuan at its peak in 2021, a shrinkage of over 67%. Against this backdrop, the high-level cash-out by major shareholders and the deep entrapment of institutional investors form the most intriguing narrative in this performance turnaround.

01

High costs and a low-price encirclement

The core of Transsion’s predicament is a concentrated stress test of the “cost-performance” model in emerging markets amid a globalized cycle reversal.

First, uncontrolled supply chain costs are direct “profit killers.” Transsion openly pointed out in its financial report that, affected by market competition and supply chain costs—especially the sharp rise in prices of components like storage—the company’s gross margin was under pressure. In 2025, gross margin fell to 19.15%, down 2.13 percentage points year-over-year, and net profit margin dropped to 3.97%, a decrease of 4.17 percentage points.

For Transsion, its product structure is mainly mid-to-low end. Data shows that in the first half of 2025, the average selling price of its smartphones was only 547.5 yuan per unit, and feature phones averaged just 50.1 yuan per unit. With such a thin hardware profit margin, the surge in storage chip prices nearly wiped out all marginal profits.

More severely, TrendForce has raised its Q1 2026 DRAM price increase forecast to an astonishing 90%-95% quarter-over-quarter. This means that in 2026, Transsion’s cost pressure not only remains but could intensify further.

This fragility in upstream bargaining power and the difficulty in passing costs downstream expose systemic risks of the low-end volume-driven model.

At the earnings conference, Transsion’s management admitted, “Price increases will have some suppression and impact on consumption, especially in the mid-to-low end, where some consumers’ willingness to buy or upgrade may be extended.”

Secondly, “involution” spills over into Africa. As the global smartphone market enters a stock game, Xiaomi, OPPO, and even Samsung are increasing their efforts in Africa and South Asia.

Canalys data shows Xiaomi’s market share in Africa has grown for nine consecutive quarters. To defend its territory, Transsion has had to ramp up its “arms race.” The annual report shows that in 2025, R&D investment was 2.95 billion yuan, up 17.23%; sales expenses also increased significantly due to intensified brand promotion.

Although Transsion’s management stated at the earnings conference that it would “reduce the proportion of sales below $100, and break into the $200+ market,” this high-end transformation in the brand-weak African market is a gamble full of uncertainty—facing both the squeeze from Samsung and Xiaomi and the structural constraint of high price sensitivity among consumers.

02

Business structure shows clear differentiation

Examining this annual report, its business structure reveals a distinct polarization.

In 2025, Transsion’s revenue in Africa reached 39.56B yuan, up 9.9%, with smartphone shipments increasing 12% to about 40 million units, a record high, maintaining a 40% market share. This indicates that its deeply cultivated channels, after-sales (Carlcare, with over 2,000 service outlets worldwide), and image algorithm barriers tailored for deep skin tones remain strong, and its “fundamental” position in Africa remains solid.

However, the “second battlefield” in Asia and other regions is flashing red. Revenue in these areas declined 11.58% to 22.81M yuan. Especially in India, Transsion faces fierce low-price competition and is also affected by geopolitical issues and local industry support policies. Management revealed that sales in India dropped about 24% year-over-year, with market share falling from 5.7% to 4.0%, ranking only eighth. For Transsion, which has been trying to replicate its African success story, the collapse in India greatly weakens its growth logic.

Faced with regional divergence, Transsion divided its market strategy into three categories at the earnings conference: in Africa and similar markets, it aims to “increase market share and selling price”; in the Middle East and other developed markets, it seeks to “improve operational quality”; and in India, it adopts a strategic approach of “even if profit margins are lower, quickly increasing market share.” Whether this “pick-and-choose” strategy will succeed remains to be seen.

More notably, compared to the fluctuations in fundamentals, the trends in the capital market are even more complex for investors.

In September 2025, during a period when Transsion’s performance was beginning to show fatigue but its stock price was still relatively high, the major shareholder, Shenzhen Transsion Investment Co., Ltd., sold 22.807 million shares at 81.81 yuan per share, cashing out 1.87B yuan through an inquiry-based transfer.

At that time, 20 institutional investors including Essence Securities Global Fund and Ruozhong Life eagerly took over, with a lock-up period of six months. However, after the annual report disclosed profits halved, by April 2nd, Transsion’s stock price had fallen to around 53 yuan per share. Compared to the transfer price of 81.81 yuan, the decline exceeded 30%.

This means the major shareholder exited with about 1.87B yuan in cash (adding the 1.01B yuan from the May 2024 sale at 125.55 yuan per share, totaling nearly 3 billion yuan in cashing out), while the institutional investors who took over faced paper losses of several hundred million yuan, greatly damaging market confidence.

03

Actively seeking a second growth curve

The 2025 financial report sounded an alarm for Transsion Holdings.

The shipment of 169 million units proves it remains a giant in the global mobile phone industry, but the “only hype and no profit” dilemma challenges its valuation logic. Pure hardware expansion has reached a ceiling and is highly volatile due to cyclical fluctuations in components like storage.

Transsion’s biggest challenge comes from both ends: upstream, rising storage chip costs cannot be contained; downstream, competitors like Xiaomi and Samsung chase aggressively, preventing price increases. Caught in the middle, profit margins naturally thin out further.

The company is actively exploring new paths, such as AI and mobile internet layouts, with Boomplay’s monthly active users exceeding 10 million and Phoenix apps seen as future valuation hopes. Management is also trying to monetize through AI assistant Ella Claw, planning to experiment with subscription models or Token purchases starting in 2026. However, at this stage, these new businesses are not yet large enough to offset the sharp decline in hardware profits.

For Transsion, 2026 will be an extremely critical year. Can it truly make money while maintaining sales volume? If not, will the capital market continue to support its “Africa story”? A big question mark remains.