After breaking from Huawei, the smartphone brand is pressing ahead with a long-awaited Shanghai IPO after reinventing itself from a smartphone brand into an AI device ecosystem company.
By Yun Fan
Chinese smartphone maker Honor is pushing ahead with a long-awaited domestic stock market listing, putting to rest rumours that its initial public offering (IPO) had been scrapped.
A fourth-stage listing guidance report submitted by sponsor CITIC Securities in late July, a move disclosed by the China Securities Regulatory Commission, shows preparations for Honor’s planned A-share listing are progressing steadily.
For China’s technology investors, the IPO would be significant. While many listed AI companies focus on chips, computing power or algorithms, Honor would offer public investors exposure to a consumer-facing AI hardware ecosystem with tens of millions of users. If successful, it could become one of China’s first major listed AI terminal ecosystem companies.
The company was valued at about 180 billion yuan (roughly $25 billion) after completing a shareholding restructuring in 2024 and expanding its shareholder base to nearly 30 investors.
From Huawei budget brand to market leader
Honor was founded by technology giant Huawei in 2013 to compete in China’s rapidly expanding online smartphone market, where Xiaomi (1810.HK) had pioneered a strategy of selling affordable handsets directly to young consumers through e-commerce.
While Honor adopted an internet-first marketing model, it also benefited from Huawei’s technology, including Kirin processors, imaging software, and communications patents. The combination proved highly successful. Products such as the Honor 3C, Honor 6 and Honor V20 quickly established the brand as one of China’s fastest-growing smartphone makers.
By 2017, Honor had reached its peak. The company shipped 54.5 million smartphones and generated 78.9 billion yuan in revenue, overtaking Xiaomi to become China’s leading internet-focused smartphone brand. Its momentum extended overseas. Honor rose to the top position in Russia’s smartphone market and entered the top five in countries including France, Italy and Saudi Arabia, raising expectations that it could eventually challenge global leaders Apple and Samsung.
The rapid growth came to an abrupt halt in late 2020 when Huawei sold Honor, allowing the business to operate independently after U.S. sanctions severely restricted the telecom giant’s access to advanced semiconductor technology.
Reinvention after independence
The separation forced Honor to rebuild much of its business from scratch.
Without Huawei’s technology ecosystem and supply chain, the company’s domestic market share reportedly fell to around 3%, while supplies of Kirin chips were cut off.
Honor responded by rebuilding relationships with major suppliers including Qualcomm, Samsung and display manufacturer BOE Technology Group. It also established a new supply chain combining overseas high-end components with domestic alternatives.
The turnaround came in 2021 with the launch of the Honor 50 smartphone series which reached a market share of 15% by the third quarter, bringing it back into competition with Apple, Samsung and Xiaomi. At the same time, the company broadened its product portfolio beyond smartphones into laptops, tablets, smart displays, watches and wireless earbuds, creating a broader connected device ecosystem.
Building an AI story for investors
As Honor recovered commercially, it also began reshaping its identity.
From 2022 onward, the company increased investment in research and development, expanding into premium foldable smartphones and proprietary technologies designed to differentiate it from rivals.
Its Magic V2 foldable smartphone, launched in 2023, set what the company said was a record at the time for the world’s thinnest inward-folding smartphone. Honor also developed technologies including its own radio-frequency enhancement chip, Qinghai Lake battery technology, AI-powered camera systems and eye-comfort display technology.
The company also partnered with universities including Fudan University on research covering imaging, communications, and advanced materials.
The shift reflected more than product strategy. It also strengthened Honor’s credentials as a technology company ahead of a public listing, where investors increasingly favor businesses with proprietary innovation rather than companies reliant solely on hardware sales.
By 2024, Honor had completed its corporate restructuring in preparation for an IPO. Many of its investors also had strong AI portfolios, reinforcing the company’s strategic focus on artificial intelligence. Its Magic7 smartphone series emphasized on-device generative AI, developed in collaboration with Qualcomm.
A broader AI ecosystem
Honor accelerated its AI ambitions in 2025 following a change in leadership which saw Li Jian, a Huawei veteran with extensive international business experience, take over as CEO. He quickly unveiled Honor’s Alpha Strategy, redefining the company as a “global AI terminal ecosystem company” rather than simply a smartphone manufacturer.
Honor pledged to invest more than $10 billion over the next five years to build its AI ecosystem. It also established new divisions focused on AI industries, embodied intelligence and humanoid robot research.
The strategy extends beyond smartphones. At the 2026 Mobile World Congress, Honor showcased a concept “Robot Phone” alongside humanoid robots, illustrating its vision of AI agents operating across multiple devices. The company has also introduced AI features designed to automate scheduling, provide proactive user assistance and enhance mobile photography, while exploring integration between smartphones and robotic platforms.
The approach reflects an effort to escape the intense price competition that has long characterized China’s smartphone market by repositioning itself as an AI platform company.
IPO remains on track
Rumors circulated in May that Honor’s IPO had been suspended, raising concerns among investors who view AI hardware as one of China’s most promising technology sectors.
The latest filing from CITIC Securities appears to have put those concerns to rest, confirming that listing preparations continue. Honor has yet to disclose the financial information required for an IPO prospectus.
For Honor, the IPO represents more than a financing event. Five years after separating from Huawei, the company is seeking to demonstrate that it can succeed as an independent technology business while convincing investors that its future lies not only in smartphones, but in the broader AI device ecosystem.
Source:
Investorscn.com
