Transsion Holdings, the manufacturer of TECNO, Infinix and itel phones, expects profit for the first half of 2026 to rise sharply even after selling fewer smartphones than in the first half of 2025.

In a voluntary forecast filed with the Shanghai Stock Exchange, the company said revenue for the six months to June 2026 will be about RMB 35.657 billion, roughly KES 683 billion, up 22.63% year-on-year. Net profit attributable to shareholders is expected at about RMB 1.756 billion, roughly KES 33.6 billion, an increase of 44.82%.

The number that matters most to analysts is net profit stripped of one-off items. Transsion expects that figure at about RMB 1.532 billion, roughly KES 29.3 billion, up 70.71% from RMB 897 million in H1 2025.

Chinese listing rules allow companies to issue an early estimate before audited accounts are ready, and Transsion notes these figures are calculated by its finance department and can move slightly when auditors finish.

The reason profit is growing while volumes are falling comes down to price. In its filing Transsion said it sold fewer smartphones in H1 2026 than in H1 2025, but revenue still climbed because the average selling price rose by a lot. In H1 2025 the company’s typical phone sold for RMB 547.5, comfortably under USD 80 or about KES 10,000 at 2025 exchange rates. That placed most of its sales in the ultra-budget segment it now says it wants to shrink.

The pressure behind those price hikes is memory. Every smartphone needs RAM and storage, and both are made from chips that artificial intelligence data centers are buying in enormous quantities. To meet that demand, chipmakers have shifted production toward expensive server memory.

That has left less supply of the ordinary DDR and NAND flash used in affordable phones, and prices have climbed hard. UBS expects DDR memory contract prices to rise another 32% in the third quarter of 2026, and NAND flash 30%, and does not see the shortage easing until at least the middle of 2028.

Transsion is more exposed than most because its business is built on low-cost devices. Research firm Omdia calculated that memory made up nearly 60% of the bill of materials for a smartphone retailing under USD 400 in the first quarter of 2026, roughly double its share two quarters earlier.

Transsion told investors at its 2025 results briefing on 27 March that it had been raising prices since the second half of 2025 and that it would change what it sells.

Management said the share of sales below USD 100 will fall, the share between USD 100 and USD 200 will rise, and products above USD 200 will grow considerably.

The company also warned that price increases dampen demand, with the effect clearest at the low and mid range where some buyers will delay a purchase or hold their current phone longer.

Part of the profit improvement in the first half also came from timing. In the first quarter of 2026 Transsion bought memory in bulk to lock in prices before they rose further. Its inventory jumped from RMB 8.903 billion at the end of 2025 to RMB 14.220 billion at the end of March, an increase of about 60% in three months. Paying for all that stock pushed first-quarter operating cash flow to negative RMB 4.094 billion.

That stockpile is why margins look strong right now. Transsion has been charging new, higher prices while still building phones from memory it bought cheaply.

Once that inventory runs out and production shifts to more expensive batches, costs will catch up. With UBS forecasting memory to remain tight through 2028, the next wave of phones will be built with pricier components.

For markets like Kenya where TECNO, Infinix and itel dominate the sub-KES 20,000 segment, the implication is straightforward: fewer ultra-cheap models on shelves and more devices priced between USD 100 and USD 200, with a bigger push above USD 200. The strategy protects margins in the short term but risks slowing upgrades in price-sensitive markets if buyers choose to wait.

The full half-year report is still to come. For now, Transsion’s numbers show a company making more money from selling less, a direct result of a global memory squeeze that is reshaping the budget smartphone market.