Press Release

VIS Maintains Entity Ratings of Transsion Tecno Electronics (Pvt) Limited

Karachi, June 16, 2023: VIS Credit Rating Company Limited has maintained the entity ratings of Transsion Tecno Electronics (Pvt) Limited (TTE) at ‘BBB+/A-2’ (Triple B Plus /A-Two) with revision in outlook from ‘Rating Watch – Developing’ to ‘Stable’. The long-term rating of ‘BBB+’ signifies adequate credit quality with reasonable and sufficient protection factors. Risk factors are considered variable if changes occur in the economy. Short-term rating of ‘A-2’ denotes good certainty of timely payments coupled with sound liquidity and company fundamentals. Outlook on the assigned ratings is ‘Stable’. Previous rating action was announced on April 13, 2023.

TTE, a joint venture between Tecno Pack Telecom (Private) Limited (The Holding Company) and Transsion Technology Limited, is engaged in the assembly of mobile phones under three different brand names. The revision in outlook takes into consideration the resumption of manufacturing facilities during May’23 after the Company was gradually able to open LCs through the expansion of banking relationships, enabling the import of semi-knocked down (SKD)/completely knocked-down (CKD) mobile kits. Going forward, the management expects inflow of key raw materials to be relatively stable and reach FY22 levels in the incoming year. Additionally, the assigned ratings incorporate the strong sponsorship profile and significant market position of all products offered in the local market.

Assessment of financial risk profile reflects a decline in topline in the ongoing year on the back of plant closure for some months and suppressed demand amidst supply constraints and inflationary pressures. However, inventory gains and cost transfer to customers boosted gross margins notably, whereas the net margin, though higher vis-à-vis FY22, was subdued due to significant exchange losses. Overall liquidity profile of the Company is considered sufficient with adequate cash flow coverages against obligations owing to manageable margins; further the Company’s advance from customer model allows for an efficient net operating cycle. Moreover, the ratings take into account and are dependent upon the conservative capitalization levels owing to an almost debt-free balance sheet (barring minimal lease liabilities). Going forward, the ratings will remain sensitive to the Company’s ability to maintain stable revenue streams amidst uncertainty pertaining to foreign exchange availability and import restrictions.

For further information on this rating announcement, please contact Ms. Asfia Amanullah (Ext: 212) or the undersigned (Ext: 207) at 021-35311861-71 or email at

Sara Ahmad

VIS Entity Rating Criteria: Corporates (May 2023)

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