HONG KONG -- Shares of Transsion Holdings, the Chinese phone maker nicknamed the "King of Africa," quickly fell over 7% in its Hong Kong trading debut on Thursday.

The Shenzhen-based company primarily produces smartphones for emerging markets. It sells devices under three brands: Tecno, which targets the mid-to-high-end segment; Infinix, aimed at younger consumers; and itel, which focuses on budget devices, many of which are priced below $100 but offer extra-large battery capacity.

Transsion sold 86.6 million shares at 35.30 Hong Kong dollars each and raised about HK$3.1 billion ($395 million). The company plans to use 40% of the proceeds for research and development of AI-related technologies, 30% for marketing, and the rest for mobile internet services and other purposes.

By sales volume, the company controls more than 50% of Africa's smartphone market. It was among the first to develop camera technology optimized for capturing darker skin tones. It also offers tailored beauty modes and flash technology for African skin tones -- features that have contributed to its popularity on the continent.

The company's long-dominant position in Africa, however, is now being challenged by some of its compatriots. Chinese rivals such as Xiaomi and Honor have also targeted Africa for expansion, intensifying competition in Transsion's core market with their own budget models.

Transsion was founded by entrepreneur Zhu Zhaojiang, known as George Zhu, in 2013, and was laser-focused on Africa before it expanded to other emerging markets. "We started in Africa," Zhu said at a listing ceremony at the Hong Kong bourse on Thursday. "Listing on the Hong Kong Stock Exchange marks a major milestone in our industrial development and a new starting point for connecting with international capital markets. Moving forward, we will maintain our sense of respect and focus, upholding long-termism as we deepen our localized roots and technological innovation." The company had an initial public offering in Shanghai in 2019. As of Wednesday, its Shanghai-listed shares were down 25% since the start of the year.

Transsion's Hong Kong listing comes at a time when investors are keen on AI stocks while sentiment toward other consumption-driven companies is lukewarm. Shares of fast fashion retailer Shein, which made its highly anticipated trading debut in Hong Kong last month, ended up dropping as much as 10% on its first day.

One investor said Transsion's share decline was expected, because the sentiment toward Hong Kong stocks has been poor overall lately. "We still believe in Transsion's future due to its solid foundation," the person said, declining to be named. "Besides Africa, they still have so many emerging markets to explore, and I don't think Transsion's model could be easily copied by rivals." Most of Transsion's revenue is from Africa and emerging Asia-Pacific markets, with each contributing around 38% of the total. In its prospectus, the company vowed to continue strengthening its position in Africa while expanding in other emerging markets.

But as a player focused on price-sensitive markets, Transsion has been hit hard by surging memory chip costs, leading to a 3% year-over-year decline in smartphone sales volume during the first four months of the year.

With gross margins under pressure, feature phone prices falling and the company shifting toward lower-margin home appliances, Transsion's net profit nearly halved to 2.6 billion yuan ($388.5 million) in 2025.

Cornerstone investors in the Hong Kong listing include Singaporean sovereign wealth fund GIC, semiconductor memory and storage company Shenzhen Longsys Electronics and Bank of China Wealth Management.