Phone maker Honor is attracting new investors

The Chinese smartphone manufacturer Honor revealed, at the end of last week, a new round of investors that it has attracted, Reuters reports, noting that it is China Telecom and a division of CICC Capital Corp. Other investors in the company include Chinese venture capital firm Cornerstone; SDG, a fund linked to a Shenzhen economic zone; and Jinshi Xingyao.

The operation comes almost a year after the company revealed its intentions to list on the stock exchange in November 2023.

Honor, formerly part of Huawei Technologies, did not disclose the financial terms of these investments.

At the beginning of the year, Honor announced that it intends to start changing the shareholder structure in the fourth quarter, after which the IPO (initial public offering) process will begin "at the right time", according to CNBC.

The company did not specify which stock exchange it will list on, but mentioned that one of the possibilities would be the Hong Kong market, where all the technological giants in China are listed.

Honor split from Chinese telecom giant Huawei in November 2020 after the parent company was hit by US sanctions on the sector in which it operates. Huawei informed that it does not own shares in Honor and has no involvement in the business decisions of the phone manufacturer.

Last month, Honor revealed that the next version of its operating system can use AI to mimic actions on a touchscreen, such as opening an app to order coffee delivery. On October 30, the company launched its new Magic7 series of phones that can use AI functions in China.

Honor was the third best-selling smartphone maker in mainland China in the third quarter of 2024, with 10.3 million shipments and a 15 percent market share, behind Vivo and Huawei, according to company data. Canalys research, cited by Reuters. The Chinese manufacturer aims to ship 100 million phones annually by 2026, up 75% from 2023, and become one of the top suppliers worldwide by 2028. These targets seem ambitious given the demand weak from the world's largest smartphone market and competition from a large number of local phone manufacturers, including Huawei, analysts say.

Just under a third of Honor's sales came from outside China in the first half of this year, according to Counterpoint.

Honor received an undisclosed amount of investment from China Mobile in August. In the same month, Reuters reported that the Chinese phone maker had received significant support from the government in its home city of Shenzhen, including research and development funding and tax breaks.

Also this summer, the Wall Street Journal reported that Beijing offered massive support to Huawei - $1 billion in subsidies, plus $5 billion in government procurement orders in 2023.