Well, The fairing seems to be an inspiration from VFR 800... Anyways, I find 350cc unlikely, Honda/ HH don't have such a powerplant yet.

I consider these possibilities practical:--> Honda has a city bike, by the name CRF 250, a 250cc Single cylinder selling in some Asian markets. Or better yet, the Mini Hornet recently released in Brasil has a 300cc engine ... HH can use either of these engines.
Or they might go the "HH" Way, and keep the same 223cc engine, borrowed from CRF 230 few years back. I hope not ...
And yes, Fairing can be big for cooling reasons too ... Specially, if it has an air cooled engine.