Huawei stunned the world by producing the first 5G chipset in three years despite US sanctions. With this application processor powering its flagship Mate 60 series, the company’s future is brighter than ever since the US first placed the company on the Entity List in 2019, calling it a national security threat.
Will Huawei go public?
There are also reportedly discussions about going public for the company, due to Huawei’s ability to evade every time the US tries to detect it and optimism that the company can regain lost ground in the smartphone industry. Founder Ren Zhengfei has always ruled out the possibility of the company’s shares being listed on the stock exchange.
However, if it is in China’s national interest for the Chinese tech giant to raise money by selling shares, Zhengfei would agree to an IPO for the manufacturer. In a letter to employees in 2021, Ren wrote that the company “may gradually enter the market in the future.” Huawei’s former sub-brand Honor, which it sold to a consortium for $15 billion in 2020, announced its plans to go public last month.
So how much could the company be worth? Based on 2022 earnings of $5.1 billion and applying the same recent earnings multiple (25x) at which Apple was traded, the company could be valued at $128 billion . However, Lenovo’s former chief technology officer Ni Guangnan said in 2019 that Huawei’s value could reach up to 1.3 trillion dollars.
At that time, Apple’s market value exceeded $1 trillion. This meant that Guangnan considered Huawei more valuable than Apple. Today, Apple’s stock market value is 3 trillion dollars. In other words, Apple may lose its throne to Huawei in 2024.
If Huawei goes public, international money managers will all want in on the action. The company’s IPO would certainly be a cause for celebration in China. Because such a listing could be seen as another sign that US sanctions against the Chinese manufacturer have failed.
So what do you think about this issue? You can share your thoughts with us in the comments section.
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