According to Bloomberg report, Transsion Holdings is planning to list on Shenzhen’s Stock Exchange Market. However, instead of going through the thorough IPO process, they intend to go through a backdoor listing by transferring a stake via an asset and share swap deal to Shenzhen-listed Shimge Pump Industry, a water pump producer listed on the Shenzhen Stock Market. In case the deal succeed, it will make Transsion Holdings one of China’s largest publicly traded Smartphone makers, alongside the likes of Huawei Technologies.
The big question now is, why not attempting some of your big markets too – Nigeria, Kenya or even South Africa?
For one, Shenzhen Stock Exchange has a higher market capitalization —$3.24 Trillion, Johannesburg Stock Exchange comes in at $900 billion market cap, Nairobi’s Stock Exchange with a $17.91 Billion market cap and Nigeria’s Stock Exchange with a market cap of $28.48 Billion, so it is understandable that firms prefer a stock exchange market that is relatively liquid since it fosters ease of entry and exit for investors.
Transsion Holdings, founded by Zhu Zhaojiang, shipped nearly 12 million smartphones to Africa in the first three quarters of last year, making them one of the biggest sellers in different African countries including Nigeria and Kenya. According to an analyst from Counterpoint, their success story can be traced to their“Distribution strategy where they managed to attract leading local resellers through affordable offerings.