China Mobile reportedly invested an undisclosed amount in Honor, the Huawei subsidiary spun off four years ago, better positioning the handset maker for a mainland listing.

According to credit inquiry platform Qichacha, the investment by the world’s largest mobile player by subscribers is designed to “enhance Honor’s financial strength and market competitiveness”, lending support to its IPO plan from major investors. Qichacha added the vendor aims to improve its ownership structure in Q4 through joint stock reform.

Neither company revealed the terms of the investment.

Shenzhen-based Honor acquired Huawei’s handset sub-brand in 2020 to allow the unit to continue to import key components, following US sanctions on the telecoms equipment giant.

As it prepares to go public, Reuters reported earlier in the month Honor received strong backing from state-owned entities, covering R&D funding, tax breaks and support to expand overseas.

Honor ranked fourth in smartphone shipments in China in Q2, with a 14.5 per cent market share after sales dipped 3.7 per cent year-on-year.