Huawei Photo: CFP

Selling Honor's assets aligns with the internal decision-making process of Huawei, and will not cause a decrease in the firm's combined net assets, nor it will have any major impacts on company solvency, Huawei said in a statement on Wednesday.

This is the second statement Huawei has released after it announced to divest sub-brand Honor to a Chinese consortium composed of over 30 businesses on Tuesday, sending a shockwave across the whole industry. 

Honor recorded business revenue of about 90 billion yuan in 2019, with net profits of more than 6 billion yuan. Honor brand's revenue accounted for between 15 -17 percent of the total revenues of Huawei's consumer business group and about 8 to 9 percent of Huawei Technologies' total revenue last year.

The buyer of Honor is a consortium named Shenzhen Zhixin New Information Technology Co, jointly founded by state-owned Shenzhen Smart City Technology Development Group Co and more than 30 previous agents and dealers of Honor, including Beijing Songlian Technology Co.

Shenzhen Zhixin changed its legal representative from Rao Junxiang to Wan Biao, who was COO of the consumer business department at Huawei, according to market information online platform Qichacha, which was later confirmed by Honor.

Zhixin also increased registered capital to about 3.07 billion yuan ($468.45 b), up by 2,973 percent, information from Qichacha showed.

Zhao Ming, chief executive of Huawei's Honor handset line, is the CEO of the new phone company, while other management team members are not confirmed to have moved to the new company yet.

Global Times