Core Viewpoint - Transsion Holdings, known as the "King of Mobile Phones in Africa," is facing significant challenges in 2024, with a marked slowdown in revenue growth and a dramatic decline in profits, indicating a multi-faceted crisis in the smartphone market [1][2][4]. Financial Performance - In 2024, Transsion Holdings reported a revenue of 68.715 billion yuan, a year-on-year growth of only 10.31%, and a net profit of 5.549 billion yuan, reflecting a minimal increase of 0.21% [1]. - The first quarter of 2025 saw a staggering 25.45% decline in revenue and a nearly 70% drop in net profit, highlighting the severity of the company's financial downturn [1][2]. - The company's gross margin fell from 24.45% in 2024 to 21.28%, and further to 19.27% in Q1 2025, marking a new low in recent years [4]. Cost and Cash Flow Issues - Operating cash flow plummeted to 2.848 billion yuan in 2024, with a net outflow of 741 million yuan in Q1 2025, driven by declining sales and inventory adjustments [5]. - Sales, management, and R&D expenses increased by 11.72%, 14.99%, and 11.55% respectively in 2024, while revenue growth was nearly stagnant, further pressuring profitability [4]. Market Competition - Despite holding a 51% market share in Africa in 2024, Transsion faces fierce competition from brands like Xiaomi and Realme, which have shown significant growth rates of 38% and 89% respectively [7][8]. - The overall smartphone shipment in Africa grew by 9% in 2024, reaching 74.7 million units, indicating a competitive landscape that is becoming increasingly challenging for Transsion [7][8]. Diversification Efforts - Transsion has attempted to diversify its business into smart home products and related industries, but revenue from these new ventures was only 4.259 billion yuan in 2024, accounting for just 6.3% of total revenue [9]. - The diversification strategy has not yet proven to be as successful as the initial mobile market entry, raising questions about its potential to drive future growth [9].