Key Takeaways
- Shein’s Hong Kong IPO values the company at about $26.5 billion.
- The offering is expected to raise roughly $1.7 billion.
- Shein faces slower growth, tighter regulation, and stronger competition in key markets.
Fast-fashion retailer Shein is set to raise about $1.7 billion as the Shein IPO nears pricing, valuing the company at roughly $26.5 billion after years of failed listing attempts.
Shein is expected to price its initial public offering at HK$48.56 a share, near the midpoint of its marketed range, according to two people familiar with the matter who spoke on condition of anonymity because the pricing has not been made public.
The offering would raise about HK$13.6 billion, or $1.73 billion, and value the Singapore-headquartered fashion company at about $26.5 billion.
Shein did not respond to a request for comment.
Pricing marks sharp valuation decline
The expected valuation is far below Shein’s nearly $100 billion private market peak in 2022 and below the $66 billion valuation it received during a fundraising round in 2023.
The lower valuation reflects slower revenue growth, weaker earnings and shrinking profit margins as the retailer faces higher trade costs, tighter regulations and growing competition in its largest markets.
The Shein IPO launched on Hong Kong’s exchange on Monday, and the overall order book was fully covered by Tuesday, Reuters previously reported.
The company is expected to announce the final offer price Aug. 31, with shares scheduled to begin trading the following day.
Investors back Hong Kong listing
Cornerstone investors have committed about $383 million to the offering, according to Shein’s prospectus.
Existing shareholders Boyu Capital, Tiger Global and General Atlantic are leading those commitments. Tencent, Greenwoods, Taikang Life and UBS Asset Management are also participating.
The strong investor interest comes after Shein spent four years trying to list in New York and London before turning to Hong Kong.
The retailer, founded in China and now headquartered in Singapore, sells low-priced clothing in about 160 countries and has become one of the world’s largest online fast-fashion companies.
Proceeds target technology and expansion
Shein plans to use about 80% of the Shein IPO proceeds to improve its technology and expand its brand and global reach, according to its prospectus.
The company has also agreed to pay as much as $3.5 billion in cash to certain investors who bought special shares during earlier private funding rounds.
The listing comes as Shein navigates slower growth. The company expects first-half revenue growth to broadly match the 1.1% increase reported in the first quarter, while its operating margin is expected to decline slightly.
Analysts and investors have closely watched whether Shein can sustain growth as regulators scrutinize fast-fashion businesses and consumers face higher prices in key U.S. and European markets, according to the report on the offering.
The Hong Kong listing would give Shein access to public capital while allowing the company to continue investing in technology and overseas expansion despite the more challenging operating environment.
