Transsion Holdings (688036): African Market Maintains Profitability and India’s Operating Conditions Improve
Event On January 16, 2020, Transsion Holdings issued an announcement of the 2019 annual results pre-increasing announcement. It is estimated that the net profit attributable to the owner of the parent company in 2019 will be 167,037.
620,000 yuan, an increase of 101,299 over the same period last year.
820,000 yuan, an annual increase of 154.
It is expected that in 2019, the net profit attributable to the owners of the parent company in place of non-recurring gains and losses will be 140,644.
740,000 yuan, an increase of 18,206 over the same period last year.
330,000 yuan, an increase of 14 in ten years.
Brief comment one, the African market continues to maintain expanding profitability, and the Indian market’s operating conditions have improved. This year, Transsion Holdings continued to maintain its changing profitability in the African market.
According to IDC data, Transsion Holdings continued to increase its city share in the African market in 2019. At the end of the third quarter, its market share in the African market exceeded 50%, and it has a higher market control area and premium capabilities.
In 2019, Transsion maintained continuous profitability in the African market, and the average unit price and gross profit margin were both higher than before.
In the African market, Transsion has covered the full range of user groups through three major mobile phone brands, TECNO, itel, and Infinix, and has a high brand reputation.
After years of accumulation in the African market, Transsion has established channel resources for deep cooperation and a perfect service system. At the same time, Transsion has developed deep face recognition, oil and water resistance based on the localized features of the African market.With unique barriers to competition.
In the future, Transsion is expected to continue to improve ASP and profitability through superior market segmentation.
In the current year, Transsion Holdings has optimized the product structure and reduced the impact of tariffs on the Indian market.
Due to the fierce competition in the Indian market, the profits of various mobile phone manufacturers in India have been hit by breakthroughs. In 2018, Transsion’s business in the Indian market alternated aggressively, and profits were affected by conflicts. In 2019, due to the reduction in tariffs, and the reduction of delivery opportunities, etc., Reducing expected margins and improving profits.
In the future, through further adjustment of strategies and strategic focus, Transsion’s business development in the Indian market will further improve.
Second, the impact of foreign exchange gains and losses on 2018 net profit increases the increase in attributable profits in 2019. Since Transsion’s overseas sales mainly use US dollars to collect payments, in order to lock forward the RMB / USD exchange rate and avoid foreign exchange risks, the company purchased since the beginning of 2018.Foreign exchange forward contract products, but due to the impact of the Sino-U.S. Trade war since May 2018, the US dollar has appreciated rapidly against the RMB, and the foreign exchange forward contract products purchased by the company have losses during delivery.
In 2018, the company purchased 77,907 foreign exchange forward contract products.
320,000 yuan, affecting the fracture of the net profit attributable to the owner of the parent company in 2018.
At present, the company’s forward contracts have all been completed, which will have little impact on future profits.
Earnings forecast: We will give Transsion Holdings 17E net profit for 2019E / 2020E / 2021.
4.4 billion, with a price-earnings ratio of 28/28/25.
The company is of high quality and still has potential for growth.
Risk Warning: The development of new markets is worse than expected, and Internet users and 武汉夜生活网 revenue growth are lower than expected.