Shein plans to raise up to HK$13.86bn (£1.3bn; $1.77bn) when its shares begin trading on the Hong Kong stock market on 1 September, in a listing that would value the fast-fashion company at almost $27bn at the top of its price range.
The Shein Hong Kong IPO will involve nearly 280 million shares priced between HK$47.60 and HK$49.50, according to a filing made by the company on Monday. At the upper end of that range, the offering would give Shein a valuation of almost $27bn (£19.8bn).
That figure is substantially below the $100bn valuation Shein reached during a private fundraising round in 2022. The lower valuation reflects weaker sales growth and higher costs, according to the information set out in the company’s filing.
Shein Hong Kong IPO follows failed listing attempts
The planned listing follows unsuccessful attempts to float Shein in both the United States and London. Those efforts faced regulatory challenges amid scrutiny of the company, which has its headquarters in Singapore but was founded in China.
The Hong Kong offering is being backed by Goldman Sachs, Morgan Stanley and JP Morgan. The involvement of the three Wall Street investment banks comes as Shein seeks to complete a long-awaited stock market debut after the earlier efforts to list elsewhere did not proceed.
Shein’s proposed share sale also comes after the company reported a deterioration in its financial performance during the first three months of the year. In July, it said it had moved into a quarterly loss as sales growth slowed following a decision by US President Donald Trump to remove an import duty exemption for small packages.
The company reported a loss of $99m for the first three months of the year, compared with net income of $395m in the same period a year earlier. The figures underline the pressure facing Shein as it prepares to ask investors to buy shares at a valuation well below the level reached in its most recent major private fundraising.
Tariff uncertainty remains
Shein is also preparing for its Hong Kong debut while uncertainty continues over the tariffs imposed by the United States and China on each other’s goods. The tit-for-tat US-China tariff war is currently paused, but the source material does not indicate how long that pause will last or what effect any future changes could have on the company.
The company’s dependence on international sales has made trade rules an important part of the background to the planned offering. The removal of the US import duty exemption for small packages was followed by slower sales and the quarterly loss reported in July. No further financial forecasts were provided in the filing information.
The Shein Hong Kong IPO therefore represents an attempt to secure fresh capital in Hong Kong after regulatory obstacles prevented the company from completing listings in the US and London. The planned proceeds of up to HK$13.86bn would be raised through the sale of nearly 280 million shares, with the final valuation dependent on where the shares are priced within the stated range.
At HK$49.50 per share, Shein would be valued at almost $27bn. Even at that level, the company would be worth far less than it was when private investors valued it at $100bn in 2022. The contrast highlights the change in market expectations as Shein faces higher costs, slower sales growth and continuing scrutiny around its attempted public listings.
Trading is scheduled to begin in Hong Kong on 1 September. Goldman Sachs, Morgan Stanley and JP Morgan are supporting the offering, while Shein’s filing sets the share price range and the maximum amount it intends to raise.
Source: BBC News
