(Yicai Global) March 4 -- Chinese budget phone brand Honor, once owned by Huawei Technologies, appears to have hit the breaks on its initial public offering, according to potential investors.

Honor told some distributors before the Chinese New Year holiday that began Jan. 31 that the share subscription was suspended until further notice, they said. The Shenzhen-based company has yet to reply to an inquiry from Yicai Global.

“We prepared CNY10 million (USD1.6 million), but received a notice of a delay,” said one distributor. “It was very abrupt.”

In mid-2021, the distributor received Honor’s share subscription notice. Each distributor was invited to invest between CNY5 million and CNY50 million (USD791,000 and USD7.9 million), though the phone maker did not provide further details of its IPO at that time.

An IPO could be beneficial to the company. In the current economic climate, going public helps to ensure sound domestic operations at phone manufacturers and attract global talent to them, according to a source at an auditor. 

Huawei sold Honor in November 2020 to a consortium that included more than 30 distributors due to US curbs on the Shenzhen-based telecoms giant buying American technologies. An investment company controlled by Citic Securities also completed an investment in Honor on Jan. 27, Yicai Global learned. 

About 314 million smartphones were sold in China last year, according to data from Cinno Research. Honor had a market share of 10.4 percent, ranking fifth behind three domestic brands and Apple.

Editor: Emmi Laine, Xiao Yi