Companies Deny Relationship with Smartphone Maker Honor’s Reverse Takeover Plans – Pandaily


Since Honor announced the completion of a new round of financing in November this year, rumors about the Chinese smartphone maker’s upcoming reverse takeover have been raging. On December 5, a number of companies related to Honor saw a huge stock price increase. Like Honor, they all belonged to Shenzhen State-owned Assets Supervision and Administration Commission, which made them targets of speculation. However, most of these companies have denied the rumors.

In 2020, Honor was made independent from Huawei, with the Shenzhen State-owned Assets Supervision and Administration Commission along with more than 30 other enterprises taking over the company. Huawei did not disclose the specific amount of Honor’s transfer but rumors at the time showed the deal was worth about $40 billion. Since then, there has been no lack of rumors in the industry that Honor is preparing for listing.

George Zhao, CEO of Honor, mentioned in an interview in August 2021 that a listing is one of Honor’s options, but the specific time and place have yet to be put on the agenda. The annual financial report would need to be considered to be disclosed.

A person close to Honor told Jiemian News that Honor does have any expectations for listing, but according to the regulations of the China Securities Regulatory Commission, the full name of Honor is still “Honor Terminal Co., Ltd.”, and no share reform has yet to be carried out by the company. It will take several years to complete the normal IPO but, the source mentioned, that as far as the current market is concerned, it is not a good time to go public for Honor. Rumors about Honor’s listing maybe related to market speculation.

According to Canalys’ statistics, in the third quarter of 2022, China’s smartphone shipments were about 70 million units, down 11% year-on-year, and the total market share of the top five companies was 83.6%. Among them, Honor shipped 12 million units, with a market share of 17.1%.

SEE ALSO: Honor X Series Smartphone Users Exceeds 100M

At present, former employees from Huawei cover many core departments of Honor, such as management, marketing, supply chain and R&D. Zhao once said that Honor has absolute autonomy in enterprise operations, business strategy, investment and other aspects, and shareholders do not participate in specific operation and management issues.

In the past, on many public occasions, Zhao has repeatedly stressed the need to benchmark the company against Apple and to invest heavily in research and development. “Huawei’s performance in the Chinese market has told us that no enterprise is invincible. At present, Honor has invested nearly 10% of its revenue in research and development, and the proportion of R&D personnel has reached 60%,” said Zhao.





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