Chinese firm, Transsion Holdings, which owns popular mobile phone brands Tecno and Itel, is concluding arrangements to list on the Shenzen Stock Exchange (SZSE). Shenzen Stock Exchange is one of China’s three stock exchanges.
Shimge Pump Industry Group Company, which is already listed, will take a majority stake in Transsion, in an asset and share swap deal. Shimge was listed on the SZSE in 2010 and has a market capitalization of $500 million.
Why not Nigeria or South Africa?
One would expect that a company making a significant proportion of its revenue from Africa, would list on an African bourse. The relatively shallow nature of African markets may be a hindering factor.
The Shenzen Stock Exchange has a market capitalization of $3.2 trillion. South Africa’s Johannesburg Stock Exchange (JSE) has a market capitalization of a $1 trillion. The Nigerian Stock Exchange (NSE)has a market capitalization slightly less than $30 billion.
Firms prefer to list on exchanges that are relatively liquid, as this enables ease of entry and exit for investors. Corporate governance, though vastly improving on the NSE, still has a long way to go.
Transsion Holdings was established in 2006 and is best known for its mobile brands including TECNO, itel, Infinix, and Spice. Statistics from the International Data Corporation (IDC), show the company was responsible for 30.1% of the 55.1 million phones shipped to Africa, as at the third quarter of 2017. The company is thus, the biggest mobile phone player in the continent. The company also manufactures digital accessories and home appliances.
Shimge Pump Industry Group Co., Ltd was founded in 1984 and specializes in manufacturing various kinds of water pumps and air compressors. The company has over 1,000 employees and an annual output 1.8million pieces pumps.