Huawei spinoff, Honor, announces an upcoming IPO
Honor has said it's gearing up to go public.
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The backstory: Over the past few years, Huawei, a major Chinese telecom company, found itself in the midst of global tensions with the US government over national security concerns. The world's biggest economy put restrictions on Huawei's access to important tech stuff, like chips, and even blacklisted it. This continued even when the president changed from Trump to Biden, and it was part of the bigger tech competition between the US and China.
Meanwhile, Honor, a company that was part of Huawei and known for affordable smartphones, faced challenges because of this. Huawei sold Honor in 2020 to a group that included some state-owned investment firms in Shenzen because Huawei was dealing with these tech shortages. Huawei said this move was to protect Honor and let it operate on its own.
More recently: In the third quarter, Honor surged ahead in China, claiming the top spot for handset shipments with over 11 million units. Insights from Canalys say that Honor was the second-largest seller the previous year. Also, the company is making waves in Europe, ranking fifth in sales during the third quarter.
The development: Honor has said it's gearing up to go public. In its official statement, the company said how well it has been doing in the past three years and that it wants to take it to the next level with an initial public offering (IPO). To prep for this, Honor is making changes to its Board of Directors, making sure it meets all the rules for a listed company. But the company is keeping the details about where and when the IPO will happen a secret for now, adding a bit of mystery to its next big move.
Key comments:
“In order to meet new strategic goals, Honor will continue to optimize its shareholding structure, attract diversified capital and enter into the capital market through IPO (initial public offering),” said Honor in a statement.
“As the company starts the IPO preparation process, the composition of the Board of Directors will gradually be adjusted, in accordance with the standards of a listed company, to embrace greater diversity for meeting the relevant governance and regulatory requirements,” said Honor.
"This move has been made by Honor's industry chain to ensure its own survival," said Huawei in 2020 when it sold Honor.
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