How Africa Helped Transsion Get Listed On China’s Starboard
*** watch the video or listen to the podcast below
Last week Shenzhen-based cell phone manufacturer, Transsion, got listed on China’s Starboard. This article will discuss what China’s Starboard is and what this listing means for the future of Transsion in Africa. Read until the end to find out exactly how many times Transsion mentioned Africa in their application prospectus and what was said.
What is China’s Starboard?
China’s Starboard (also referred to as the Science and Technology Innovation Board) was created to experiment with a registration-based IPO system in order to alleviate some of the traditional difficulties of getting listed on one of China’s various stock exchanges.
Barriers for Tech Companies
Traditionally, a company must certify that it meets the right requirements for listing with the China Securities Regulatory Commission (CRSC). But, the problem is, even if a company meets the right requirements, the CRSC has the power to approve or reject applications based on China’s own economic goals.
Another barrier for growing tech companies is that, in order to get listed, your company has to display cumulative profit. Tech companies tend to have future value but are not always profitable in their first few years.
Here’s an example:
- Facebook was created in February 2004 but didn’t become profitable until September 2009
- Tesla was established in 2003 but didn’t record it’s first back to back profit until 2018
Because China has this listing problem a number of the nation’s most valuable tech companies, like Tencent, have decided to abroad.
Why Transsion Matters
Transsion has been at it for a while now. But, they are now at a point where other big tech companies, like Huawei and Samsung, are looking to do the exact same thing that Transsion has done in Africa. A lack of available capital is making it hard for the handset company to keep up.
Since Transsion has an established presence throughout the African continent, it was a pretty easy choice for listing. China has a strong motivation to strengthen ties with African nations, particularly in the realm of tech. As we’ve seen in the past year, Chinese tech companies are having a hard time in Western markets and need to branch out.
It might have taken Transsion almost a year to get listed, but it was well worth it. They are now IPO and have been given funds that might help them make a stand against rising competition.
What Transsion Said About Africa
In order to get listed Transsion had to apply. In its 394-page application prospectus, Africa (in the form of 非洲) was mentioned a total of 191 times.
Here are some of the most significant shout outs:
1.
Transsion’s market share in Africa is high at 48.71%.
- This one is pretty obvious. If you want to learn more about how Transsion pulled this off you can check out my video here.
2.
According to IDC statistics, during the reporting period, the market share of global mobile phone manufacturers in the African market was as follows….
- Starting from the top left, the chart lists market share from 2018, 2017 and 2016. The second column lists all the top ten phone brands on the continent in order of highest to lowest markets share. The top two are Transsion and Samsung and the fourth is Huawei. What’s interesting to me is that some of the other brands on the list are smaller cellphone manufacturers, like HMD, TCL and Condor Electronics.
3.
The cooperation between China and African and Indian private enterprises has achieved remarkable results and has become an important driving force for China-Africa and China-India cooperation. The mobile phone industry has become a prominent representative of China’s emerging industries in Africa and India. In the future, under the guidance of the “Belt and Road Initiative”, with the cooperation of China and Africa and India in the construction of information and communication infrastructure,Transsion will represent the mobile communication terminal facility， relying on the policy and financial support of China’s countries along the “Belt and Road”, entering a new stage of development.
- This stuck out to me because of their mention of India, Africa, and China as a collaborative force that will promote development. From my understanding, China and India are competing for influence throughout the African continent. India has always had the benefit of having a strong presence in Africa through local communities that have been here for years. A number of African countries have sizeable Indian communities including places like Kenya, Tanzania, South Africa, and Nigeria. But, since China has continued to solidify its presence in Africa, the level of that influence is changing. Even still, it seems that Transsion sees a more collaborative future that rests on the wide-reaching arch that is the belt and road initiative.
Ok friends. There you have it. Some info about the Starboard and what Transsion’s new status means for the growing company. Hope you learned something. Feel free to check out the video and podcast embedded below.
