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reporter of china business network: wang jing editor of china business network: dong xingsheng

on the evening of september 6,transsion holdings(688036.sh, share price 81.10 yuan, market value 91.58 billion yuan) issued an announcement on major matters, stating that the company received the "detention notice" and "case filing notice" issued by the zhen'an district supervisory committee of dandong city on september 6, which decided to take detention measures and initiate an investigation against the company's financial director xiao yonghui.

transsion holdings said in the announcement: "as of the date of disclosure of this announcement, the company has not been informed of the progress and conclusion of the investigation. the company will continue to pay attention to the follow-up situation and fulfill its information disclosure obligations in a timely manner." "the company has a sound governance structure and internal control mechanism. other directors, supervisors and senior management personnel are performing their duties normally. this matter will not have a significant impact on the normal operation of the company."

according to the relevant announcement released by transsion holdings, xiao yonghui was born in 1969 and has a college degree. he has worked in jiangxi qingjiang chemical plant and ningbo bird co., ltd. and has served as the chief financial officer of transsion holdings since january 2014. in july this year, zhang qi, director and deputy general manager of transsion holdings, yang hong, director and deputy general manager, and xiao yonghui and others planned to increase their holdings of the company's shares within 6 months from july 16, with a total increase of no less than 10.8 million yuan and no more than 14 million yuan. in addition, he also attended transsion holdings' 2024 first half performance briefing on august 28.

regarding the reasons why xiao yonghui was detained and investigated, as well as whether it would involve listed companies and other issues of concern to the outside world, the reporter interviewed relevant staff from the company's securities department through wechat, but no response was received as of press time.

in the first half of this year, transsion holdings achieved operating income of 34.558 billion yuan, a year-on-year increase of 38.07%; net profit attributable to shareholders of listed companies was 2.852 billion yuan, a year-on-year increase of 35.7%. as for the reasons for the performance growth, the company explained that it was mainly due to the company's continued development of emerging markets and promotion of product upgrades, and the overall shipments increased year-on-year.

image source: financial report screenshot

in terms of market share, idc data shows that in the first half of 2024, transsion holdings' share of the global mobile phone market was 14.4%, ranking second among global mobile phone brand manufacturers, of which the share of smartphones in the global smartphone market was 9.1%, ranking fourth. specifically in regional markets, the company's share of the african smartphone market exceeded 40%, so it is also known as the "king of african mobile phones"; in bangladesh, the smartphone market share ranks first; in the indian market, the company's smartphone market share ranks seventh.

however, transsion's entry into emerging markets was not all smooth sailing. it is reported that this year is the eighth year that transsion has entered the indian market. the company ranked sixth in the indian market last year, and its ranking in the first half of the year has dropped instead of rising. regarding the current price range of mobile phones sold by transsion in the indian market and how to deal with competition from other manufacturers, idc recently told reporters: "at present, transsion's indian market is mainly entry-level and mid-range products (us$400 price range), but transsion is also continuing to explore higher price ranges based on the opportunities for user upgrades in the indian market. although there are political risks in india, the market is the second largest smartphone market in the world after china, so the market competition is relatively more intense, and it is more difficult to enter the top five (indian mobile phones). if manufacturers need to maintain their competitiveness locally, in addition to a complete online and offline retail network, they also need to establish brand awareness to capture the local consumers' psychological needs for upgrades and the value of 'social status'."

in addition, transsion is currently facing the trouble of patent litigation in the indian market. since july, qualcomm has successively sued transsion and its related subsidiaries for patent infringement in relevant courts in india, germany and other places, claiming that transsion has infringed its patent rights, and requiring the company and the sued subsidiaries to stop the infringement, deliver and destroy related products containing the patents involved in the lawsuit, and compensate for losses.

regarding the progress of the patent dispute between the two parties, transsion responded at the aforementioned performance briefing: "transsion's sales network covers more than 70 emerging market countries in africa, south asia, etc. in these countries, some patent holders (qualcomm) do not own or only own a small number of patents, but demand a global unified rate, demanding excessively high licensing fees, without considering the differences in economic development levels in different regions, the fact that they have no patents or only a small number of patents in a specific region or market, and the fact that existing cases provide different rates in different regions. we believe that the practices of some patent owners do not fully comply with the principles of fairness, reasonableness and non-discrimination. transsion will continue to conduct patent negotiations with third parties, and while respecting the intellectual property rights of others, promote the determination of reasonable licensing fees within the framework of the principles of fairness, reasonableness and non-discrimination, so as to achieve a win-win situation for the industry chain including patent owners and licensees.”

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