(Yicai) Aug. 26 -- Honor, the smartphone maker that Huawei Technologies spun off four years ago, has received an investment from China Mobile ahead of its initial public offering.

Honor confirmed the investment to Yicai on Aug. 24, following a Bloomberg News report the previous day about China Mobile buying a stake in the Shenzhen-based handset maker. Honor did not disclose the size of the investment.

The company, which ranks third in China’s smartphone market by shipments, said earlier this month that it would kick off a shareholder reform in the fourth quarter and start the IPO process at an appropriate time. The listing is expected to be a major event in China’s tech industry.

Honor has been preparing for an IPO as part of its growth strategy, aiming to use the funds raised to fund research and development, expand market reach, and enhance its competitiveness, especially as it faces increasing competition from brands such as Xiaomi, Apple, and Samsung.

Set up by Huawei in 2013, Honor was sold off in November 2020 to avoid US sanctions that restricted the parent company’s access to key components and software. Since becoming independent, Honor has focused on expanding its product lineup and market presence, offering a range of phones, laptops, wearables, and other consumer electronics.

The new investment creates a positive synergy between the personal and home devices markets, because China Mobile has advantages in channels and user resources, and Honor is a leader in the smart terminal field, thanks to its rich product portfolio, the company also told Yicai.

Honor will adhere to the principles of openness and transparency in its development and continue to diversify its equity structure, it added.

The company shipped 10.7 million handsets in the second quarter, placing it behind compatriots Vivo Communication Technology and Oppo Mobile Telecommunications, according to market researcher Canalys.

First-half net profit at China Mobile, the country’s largest telecoms carrier by revenue and user numbers, rose 5 percent from a year earlier to CNY80.2 billion (USD11.3 billion) on a 3 percent gain in revenue to CNY546.7 billion (USD76.8 billion).

Editors: Dou Shicong, Futura Costaglione