In 2020, a consortium of investors tried to save Huawei’s smartphone business in the face of sharply increased US sanctions, as a result of which many assets came under the control of the newly created Honor, and the latter was able to retain access to both Western component base and Google software. Honor, which is preparing to go public, is now enjoying growing support from Shenzhen authorities.
Image source: Honor
This was reported by Reuters with reference to Honor documentation and comments from knowledgeable sources. In the long term, the Shenzhen municipal government would like to leave the financing of the business to outside investors, but for now they are giving Honor increasing support as it prepares the company for an IPO. It is expected to enter one of the Chinese stock exchanges at the end of this year or early next year. The parameters of the IPO are not publicly discussed, but when the company was formed in 2020, its assets were valued at $13.8 billion.
Representatives of Honor deny the very fact of financial preferences from the Shenzhen government; the company intends to begin reforming its share capital structure in the fourth quarter of this year, and expects to launch an IPO at the right time. Honor is one of the six largest companies based in Shenzhen in terms of annual revenue, which collectively reaches $27.6 billion. According to unofficial data, the municipal government is providing Honor with expanded support, not only in various benefits, but also in the allocation of a dedicated team officials who are ready to solve the company’s problems literally around the clock. She will also allegedly be given subsidies for research “retroactively,” since the relevant developments have already proven their effectiveness, and such expenditure of budget funds will not be wasteful. The city authorities are also ready to help Honor develop its distribution network both in China and abroad.