Honor Plans Stock Reform in Q4 and Will Initiate IPO at the Right Time

On August 5th, in response to media reports related to rumors of going public, Honor stated that ‘Honor has always adhered to the principle of open and transparent development and will continue to diversify its equity structure. Honor plans to initiate the corresponding shareholding reform in the fourth quarter of this year and will timely begin the IPO process thereafter.’

Honor further stated that the company will disclose relevant financial data during the process. Since January 1, 2021, Honor has not received any support from the Shenzhen municipal government beyond what is typically provided to ordinary enterprises. At the same time, the specific support items mentioned in the relevant reports have never been received by Honor.

‘Based on the information, Honor’s standalone IPO will take at least 1 to 2 years from preparation to formal listing,’ a broker’s representative told reporter, estimating that the IPO will be permitted in 1 to 2 years. ‘It is appropriate to actively prepare at this stage.’

The official website shows that Honor was born in 2013 and is a smart terminal provider. The company currently has over 13,000 employees, with more than 60% being R&D personnel. There are over 45,000 experience stores and dedicated counters, and the number of devices online exceeds 200 million. The company has seven major R&D bases located in Beijing, Shanghai, Shenzhen, Nanjing, Xi’an, France, and Japan. Over 85% of the production processes in the Honor Pingshan Intelligent Manufacturing Industrial Park are completed by automated equipment, and more than 60% of the equipment is developed in-house.

According to data from International Data Corporation (IDC), in the second quarter of 2024, the shipment volume of the Chinese smartphone market is expected to be approximately 71.58 million units, a year-on-year increase of 8.9%. Among these, Honor holds 14.5% of the market share, ranking fourth in the domestic smartphone market.

In 2020, Honor became independent from Huawei. On November 17 of that year, Shenzhen Zhixin New Information Technology Co., Ltd. (referred to as ‘Shenzhen Zhixin’) signed an acquisition agreement with Huawei, completing the comprehensive acquisition of assets related to the Honor brand. After the sale, Huawei no longer held any shares in the new Honor company.

At that time, market news indicated that Honor had an agreement with the relevant acquisition entity, stating that Honor needs to go public three years after becoming independent. Over the following more than three years, rumors about ‘Honor backdoor listing’ frequently emerged. In response to these rumors, Honor has publicly denied them multiple times.

On November 22, 2023, Honor officially clarified its listing method. The company released a board announcement stating that in order to achieve the next stage of strategic development, it will continuously optimize its equity structure, attract diversified capital, and promote the company’s entry into the capital market through an initial public offering; as the company’s plans to enter the public market gradually commence, the board of directors will adjust according to the standards of listed companies, and the board members will gradually diversify to meet the governance and regulatory needs of the company in the new development stage. At that time, in order to promote the listing matter, Honor adjusted its board members, appointing Wu Hui, representing the major shareholder Shenzhen state-owned assets, as the company’s chairman, while the original chairman Wan Biao took on the role of vice chairman. It is understood that Wu Hui previously served as the chairman of Shenzhen Water (Group) Co., Ltd., and one of his main tasks upon joining Honor is to advance the company’s listing process.

SEE ALSO: Honor Announces New Leadership Prior to Intended IPO