Transsion Holdings' net profit plummets 53% in 2025; storage chip price hikes become the biggest "profit killer" | Financial Report Insights

February 26, Transsion Holdings, known as the "King of Mobile Phones in Africa," released its 2025 performance express report. This report shows that Transsion Holdings’ profitability is undergoing a severe test amid a complex global supply chain environment and fierce market competition. From the perspective of core financial metrics, Transsion Holdings' profit statement for 2025 shows an overall contraction. The net profit attributable to the parent company dropped by 53.43% to 2.584 billion yuan, and the net profit after excluding non-recurring gains and losses fell even further to 1.968 billion yuan, a year-on-year decrease of 56.66%. Operating profit also declined by 51.25%, shrinking to 3.204 billion yuan. In terms of operating revenue, the performance of 65.623 billion yuan only slipped slightly by 4.50% during the overall downturn period, indicating that Transsion still has a degree of resilience in global emerging markets. However, the mild decline in revenue combined with the sharp drop in net profit shows the company experienced the typical predicament of "increased revenue without increased profit" (or slight revenue decrease with significant profit decrease) in 2025. The quality of its earnings noticeably deteriorated, and basic earnings per share also saw a significant decline. Through this unaudited preliminary accounting data, it is clear that Transsion Holdings is undergoing a painful period of transformation. As the benefits of cheap supply chains wane, the company is forced to rely on higher R&D and marketing investments to maintain its moat and compete for shares in emerging markets. Supply Chain "Assassin": Rising Storage Parts Prices Erode Gross Margin The financial report identifies the primary factor weighing on performance as "affected by market competition and supply chain costs, the prices of components such as storage increased significantly." Memory chips (RAM and ROM) are a major cost component in smartphones. Between 2024 and 2025, the upstream semiconductor storage cycle reversed, and prices continued to rise. For Transsion, which primarily targets price-sensitive emerging markets such as Africa and South Asia, its product pricing strategy often has to strike the utmost balance in price/performance ratio. Under fierce market competition, Transsion is unable to fully pass the soaring component costs on to downstream consumers, and can only rely on sacrificing its own gross margins to hold onto market share. This squeeze from both upstream and downstream is the "main culprit" behind the collapse of its profit defenses in 2025. The Cost of Breaking the Dilemma: Rising Expenses in Both R&D and Sales Facing pressure from rising hardware costs, Transsion did not choose to scale back, but instead increased its investment in the future, directly leading to increased expenses during the period. On one hand, competition in the smartphone industry has long evolved from purely hardware battles to a contest of hardware-software ecosystems and end-user experience. The financial report notes that the company continues to innovate technologically and increases R&D investment in products to enhance user experience and product competitiveness. On the other hand, to break the single-region growth ceiling, Transsion is actively expanding globally (such as Latin America and the Middle East/Africa), which necessitates greater efforts in market expansion and brand promotion, and sales expenses have risen accordingly. The "dual approach" of R&D and marketing, although fueling long-term development, undoubtedly further exacerbated the shrinkage of operating profit in the short term. Balance Sheet Remains Stable Despite severe blows to the profit side, Transsion's asset base has remained relatively stable. As of the end of 2025, the company's total assets were 44.363 billion yuan, a slight decrease of 1.55% from the beginning of the reporting period; owners' equity attributable to the parent company was 20.449 billion yuan, a contrarian increase of 1.08% compared to the beginning of the period. The net asset per share attributable to the parent company was 17.76 yuan, up 0.11%. This shows that even in a year of significant profit fluctuations, the company has maintained the fundamentals of asset quality, without significant asset impairment or risk of leverage deterioration. Risk Warning and Disclaimer The market involves risks, and investment requires caution. This article does not constitute personal investment advice and does not take into account the specific investment objectives, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular situation. Investment based on this, responsibility is at your own risk.