Chinese smartphone maker Honor benefited from strong state backing as it prepares to launch an IPO, a move designed to improve its appeal to investors, Reuters reported.
According to the outlet’s sources, the former Huawei-owned business has received backing which is “unusually high”, and includes R&D funding, tax breaks and support to expand overseas.
The sources stated it had seen the information on three Shenzhen government documents.
If its planned IPO is successful, the plan could mean the city is able to cash-out its investment in the company.
Shenzhen-owned companies were part of a Chinese consortium which bought Honor from Huawei in 2020, and the company is worth around CNY100 billion ($13.8 billion), according to Reuters sources.
The documents indicated Honor is among Shenzhen’s top six enterprises, making it a big source of tax revenue. It has an industrial output of more than CNY200 billion.
Projections about its planned listing were not revealed, however the company is planning to list on China’s A-share market where it expects a higher valuation.
The IPO could be held later this year, or in 2025.
Honor indicated it was making initial preparations for a public listing in November 2023, outlining a goal to “attract diverse capital”.
The company is likely to use cash raised to meet a target of shipping 100 million handsets annually by 2026, a 75 per cent jump from 2023. It also has designs on becoming a top three global vendor by 2028, Reuters reported.
The post Honor gets strong state backing as IPO nears appeared first on Mobile World Live.
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