R&D spend retroactively funded by local govt -documents
SHENZHEN, China - Chinese smartphone maker Honor is receiving an "unusually" high level of support from local government backers, as the former Huawei unit prepares an initial public offering , according to policy documents and a person close to the matter.
Honor was thought to be worth about 100 billion yuan when a consortium under Shenzhen-owned entities bought it from Huawei in 2020, Reuters reported at the time. The handset maker has declined to disclose any IPO details such as how much it reckons it is worth now. Shenzhen's commerce department, tax bureau and the Futian district government did not respond to requests for comment.
Those targets appear ambitious given soft demand in the world's largest smartphone market and competition from a dizzying number of local handset makers including one-time parent Huawei, said analysts including Toby Zhu at Canalys.The official support illustrates the growing importance of Honor to Shenzhen's economy at a time when a slowdown in the property sector - a key source of tax revenue - has dragged on the finances of local governments nationwide.
"Supporting Honor's development is of great significance to our city for stabilising industrial growth, exports and for gathering the complete ecosystem of the smart device industrial chain," authorities wrote following a March meeting.
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