Transsion cuts its Hong Kong listing to $428 million, under half of last year's reported ask

Working the two 2025 lines backwards puts 2024 revenue at about 68.6 billion yuan and 2024 profit at about 5.5 billion yuan ^[16][17]. Net margin fell from about 8.1% to about 4.0% ^[18]. At the old margin, 65.5 billion yuan of sales would have produced roughly 5.3 billion yuan of profit. Lower revenue therefore explains only about 0.25 billion yuan of a 2.9 billion yuan drop ^[19]. Spread across the more than 91 million handsets Tecno, Infinix and iTel sold last year ^[11], the 2.6 billion yuan of profit comes to under 29 yuan a phone ^[12].

SCMP reported a market value of 62 billion yuan for the Shanghai shares ^[3]. That is about 24 times 2025 profit and about 11 times what Transsion earned the year before ^[13]. The reports do not give the Shanghai share price or the size of each cornerstone commitment. Without them, there is no way to work out the HK$38.80 cap's ^[6] discount to the Shanghai shares, or how much of the book GIC, Longsys Investment and Bank of China Wealth Management ^[7] already cover.

The ask has fallen further than the profit. SCMP's sources said the target is half of what Transsion reportedly sought last year ^[22]. On that account the earlier ask was about US$1 billion, and the filed US$428.1 million ^[6] is about 43% of it, a cut of roughly 57% against a 53% fall in profit ^[23][10]. The offer equals about 4.6% of the Shanghai market value ^[14]. The China Securities Regulatory Commission approved 132 million offshore shares ^[4], and the filing uses about two-thirds of them. That leaves 45.4 million approved shares, worth about HK$1.76 billion at the cap, unsold ^[15].

The deal can resolve a few ways. Suppose the book prices at HK$38.80 and the stock holds above the offer once trading starts on Oct. 15 ^[2]. That would mean buyers will pay the full asking price for a company whose margin halved. Pricing below the cap would mean the order book could not fill even the reduced deal at the company's own ceiling. The third outcome is a full price on cornerstone support followed by a weak debut, with GIC and the other anchors carrying the loss.

I think Transsion has sized this deal so it gets done. It filed for less than half of last year's reported ask and left a third of its approved shares unissued. That gives up about HK$1.76 billion of sale capacity it had permission to use ^[15], and in return the book is small enough for its cornerstones to anchor. Transsion is joining a run of mainland companies raising money in Hong Kong ^[1]. That makes the listing a test of whether the market will fund a reduced Transsion at the cap. Whether investors will pay up for a shrinking handset maker is a bigger question, and this deal does not answer it. The case against my view is the cornerstone list itself: Singapore's GIC signed on in time to be named in the launch filing ^[7], and that commitment is its own judgement of the price. I would be wrong if the offer prices at HK$38.80 and is upsized toward the 132 million approved shares ^[4].