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Stumbling Transsion Reportedly Weighing A Dual Listing In Hong Kong - But Is The Timing Right?

The budget smartphone maker is reportedly considering a Hong Kong IPO to complement its existing listing on Shanghai's STAR Market

Key Takeaways:

Shanghai-listed Transsion is reportedly weighing a second IPO in Hong Kong that could raise up to $1 billion

The budget smartphone maker rose to prominence by tapping the underserved African market, but its revenue began to contract last year as it faces growing competition

When it comes to fundraising, timing is everything. But budget cellphone maker Shenzhen Transsion Holdings Co. Ltd. (688036.SH) apparently hasn't learned that lesson, based on the timing of new reports that it's considering a second listing in Hong Kong to complement its existing listing on Shanghai's STAR Market.

The company is one of China's least-known cellphone superstars due to its focus on budget models under the Tecno, Infinix and Itel brands that typically sell for $100 to $200. The company quietly built up a dominant presence in Africa, before bursting onto the global leaderboard in 2023 when it became one of the world's five biggest manufacturers with its expansion into other developing markets.

But lately Transsion has fallen on hard times as China's other cellphone makers start to challenge it in Africa, and it stumbles in some of its newer markets. Making matters worse, the company was sued by global telecoms chip giant Qualcomm last year, and its longtime CFO also disappeared briefly last September under worrisome circumstances.

Such conditions hardly make the company look like a strong candidate for a Hong Kong IPO right now. But that's exactly what it appears to be doing, based on a Bloomberg report last week that the company is talking with advisors about a potential Hong Kong listing that could raise about $1 billion.

While its own circumstances hardly look encouraging, Transsion is undoubtedly encouraged by a red-hot Hong Kong IPO market that has been especially kind lately to Chinese companies seeking second listings to complement existing ones on domestic A-share ...