Core Insights - Honor's CEO Li Jian expressed a forward-looking vision for the brand's fifth anniversary, emphasizing a youthful and dynamic approach to its future journey [1] - The departure of key management members, including CMO Guo Rui, signals a significant leadership transition as the company approaches its IPO and navigates its fifth year of independence [1][3] Management Changes - Honor's management team has undergone multiple changes from fall 2024 to the end of 2025, with significant departures including former Vice Chairman Wan Biao and CEO Zhao Ming [3][4] - Wan Biao, a pivotal figure in Honor's early independence, left for personal reasons and subsequently joined a battery technology company as CEO [3] - Zhao Ming's resignation in January 2025 was attributed to health issues, marking a critical point in the leadership transition [3] - The new management team, including Li Jian as the new CEO, is expected to drive strategic restructuring and prepare for the upcoming IPO [4] IPO Progress - Honor completed a significant shareholding reform on December 28, 2024, changing its name to Honor Terminal Co., Ltd., which cleared the way for its IPO [6] - The shareholder base expanded to 23 entities, including major players like China Mobile and China Telecom, enhancing the company's resource foundation for the IPO [6] - As of June 26, 2025, Honor entered a substantive phase of its IPO process, with a structured three-phase guidance plan expected to conclude by March 2026 [6][7] Market Performance - Honor's market share faced challenges in 2024, dropping to 14.9%, a year-on-year decline of 8.1%, but showed signs of recovery in Q3 2025 with a share of 14.4% and 990,000 units shipped [8] - Despite the recovery, recent data indicates that Honor's market position remains unstable, fluctuating between the fifth and sixth ranks in the domestic market [8] - Changes in product pricing and user demographics may pose risks to the company's performance stability, particularly as a significant portion of its market share is concentrated in the price-sensitive segment [9]

Core Viewpoint - The trend of companies initiating stock reforms earlier in the primary market raises concerns about the lack of clarity and planning in the process [1][6][12]. Group 1: Stock Reform Timing - Companies are increasingly starting stock reforms without having a clear plan or timeline for their IPO [2][10]. - Historically, stock reforms were closely tied to IPO preparations, but now there seems to be a disconnect, with some companies rushing into reforms prematurely [6][20]. Group 2: Due Diligence and Awareness - Investors should conduct thorough due diligence to assess whether a company is genuinely prepared for an IPO or merely using stock reform as a tactic to buy time [14][32]. - There is a warning against assuming that a stock reform automatically indicates a forthcoming IPO, as many companies may not be ready for such a step [13][35]. Group 3: Financial Implications - The treatment of buyback agreements during stock reforms can vary significantly, affecting the net assets reported by companies [25][29]. - Companies may not need to clear buyback agreements before stock reforms, which can lead to misleading financial representations [19][21]. Group 4: Market Conditions - The current market conditions suggest that completing a stock reform does not necessarily correlate with compliance or readiness for an IPO [36][41]. - Many pre-IPO investments have failed, indicating that stock reform alone is not a reliable indicator of future success [39][42].

Group 1 - The core idea of the article emphasizes the importance of stock reform for companies aiming to go public, likening it to a "health check and rectification" process that addresses historical financial and management issues [1] - Stock reform involves clarifying the company's financial status and resolving past problems, such as incomplete capital contributions and unclear accounting records, to avoid issues during audits [1][3] - The overall process of stock reform includes preparation, self-assessment, due diligence, and compliance with regulations, ensuring that the company is ready for the public offering [1][6] Group 2 - In the preparation phase, selecting the right intermediaries, such as accountants and financial advisors, is crucial for identifying and addressing historical issues within the company [2][3] - Companies should conduct internal assessments before engaging external intermediaries to understand their own issues and prepare for targeted solutions during due diligence [2] - During due diligence, companies must focus on verifying asset existence, liabilities, and the legitimacy of past capital contributions to ensure a clean financial slate [3][4] Group 3 - The design of the reform plan should prioritize retaining essential assets while eliminating non-core or unprofitable segments, ensuring that the company is streamlined for profitability [4][5] - Financial records must be thoroughly cleaned up, addressing any discrepancies in capital contributions and ensuring compliance with accounting standards [4][5] - The execution of the reform must follow established procedures, ensuring that all reports and evaluations align and that necessary approvals are obtained [5][6] Group 4 - Compliance and risk management are critical during stock reform, with each company's approach varying based on its structure, such as state-owned or private enterprises [6][7] - Companies must ensure that their net assets are accurately represented and not artificially inflated, maintaining a buffer for unforeseen expenses [8] - Related party transactions and the use of company funds must be carefully managed to prevent financial misrepresentation and potential legal issues [8]