HONG KONG: Online fast-fashion retailer Shein’s valuation has dropped by around 70 per cent from a near US$100 billion private market peak four years ago, as it aims to raise up to HK$13.86 billion (US$1.77 billion) in its Hong Kong IPO launched on Monday (Aug 24).
Shein is selling 280 million shares between HK$47.60 and HK$49.50 per share, the filings showed, valuing it at close to US$27 billion at the top of that range.
The valuation has dropped sharply from earlier private fundraising rounds that valued Shein at US$98.2 billion in 2022. The company was valued at US$64 billion in 2023 and April 2024.
The company will announce the final price on Aug 31 and start trading on Sep 1.
Known for selling US$5 dresses and US$10 jeans to shoppers in about 160 countries, Shein had first sought an IPO valuation of US$30 billion to US$40 billion when investor meetings ahead of the IPO kicked off.
The marked decline in valuation comes after Shein faced questions over slowing growth, rising costs and changing market conditions. Investors had said they were not convinced Shein could return to the growth rates that valued it at nearly US$100 billion four years ago.
Cornerstone investors led by existing shareholders Boyu, Tiger Global and General Atlantic have subscribed for about US$383 million worth of Shein shares, the prospectus showed. Tencent, Greenwoods, Taikang Life and UBS Asset Management will also take stock.
Shein said it would use about 80 per cent of the cash raised in the IPO to improve its technology and increase its brand and global presence.
It has agreed to pay up to about US$3.5 billion in cash to certain investors who bought special shares in earlier private funding rounds, according to the prospectus.
The shares sold in the Hong Kong IPO will have one-tenth the voting rights of the shares held by the company’s founders.
Co-founders Sky Yangtian Xu, Maggie Gu, Molly Miao and Tony Ren will control 90 per cent of Shein’s voting rights, the prospectus showed.
GROWTH SLOWS SHARPLY
The long-awaited float comes as slowing revenue growth and weaker core earnings weigh on Shein’s business, while shrinking margins have also raised concerns that its expansion is running into headwinds from higher trade costs, tighter regulatory scrutiny and intensifying competition across global e-commerce.
Shein said in the prospectus that its first-half 2026 revenue growth is expected to be broadly in line with the 1.1 per cent growth posted in the first quarter, while its operating margin is expected to be slightly lower than the first-quarter level.
The company said that this is due to new European import charges, pricing pressure and weaker demand in the Middle East linked to the Iran war.
It swung to a US$99 million quarterly loss after the US removed an import duty exemption on small packages, and a US$328 million fair-value charge on convertible redeemable preferred shares following an accounting change.
Shein’s IPO is the largest new share sale in Hong Kong in 2026, surpassing autonomous driving firm Momenta Global’s US$751 million offering in July.
It is the third-largest IPO in Asia, behind CXMT and China Resources New Energy, which raised US$9.8 billion and US$3.6 billion respectively in Chinese onshore IPOs.
Hong Kong IPOs have raised about US$41 billion so far this year, a record for the period and more than double the US$17 billion raised a year earlier, LSEG data showed.