Honor, Huawei's Subsidiary, Unveils Ambitious IPO Plans

In a statement released on Wednesday (22/11), Honor, the subsidiary of Chinese technology giant Huawei, revealed its intentions to go public.

The company expressed its commitment to optimizing its shareholding structure, attracting diverse capital, and venturing into the capital market through an initial public offering (IPO) as part of its strategy to achieve new goals.

While the specific country for the IPO listing was not disclosed, the move to tap into public markets is a clear indication of Honor's ambitious expansion in the competitive smartphone market.

The company aims to pose a significant challenge to industry leaders Apple and Samsung, particularly in the high-end smartphone segment.

Huawei was compelled to sell Honor in 2020 due to multiple U.S. sanctions that severely impacted its smartphone business, cutting off crucial technologies such as software and semiconductors.

The sale involved a consortium of buyers, including the government of Shenzhen, Huawei's headquarters city in southern China.

The spinoff of Honor was strategically implemented to safeguard the brand and enable it to operate independently.

Under Huawei's ownership, Honor was positioned as a midpriced brand that achieved success in select markets.

However, the company now seeks to make a foray into the premium tier of the smartphone market, competing directly with industry giants.

While Honor currently holds the largest market share in China, its global presence remains relatively modest, necessitating efforts to enhance brand recognition.

To bolster its position, the company recently launched two high-end foldable phones.

Honor has officially initiated preparations for the IPO, emphasizing that as the process unfolds, adjustments to the composition of the Board of Directors will be made to align with the standards of a listed company.

This strategic move aims to embrace greater diversity and ensure compliance with relevant governance and regulatory requirements, marking a crucial step in Honor's evolution as an independent player in the tech industry.

Arjun Kharpal / CNBC