Shein IPO cuts valuation to US$26 billion as shares stumble on Hong Kong debut
Shein Group (HKG:0625.HK)‘s long-awaited Hong Kong listing has crystallised a sharp reset in the fast-fashion giant’s valuation, with shares falling around 9% on debut and investors valuing the company at roughly US$26 billion — barely a quarter of its private-market peak.
The Singapore-headquartered company sold about 280 million shares at HK$48.56 each, raising approximately HK$13.6 billion, or US$1.7 billion, in Hong Kong’s largest IPO of the year.
The offer price came in below the maximum HK$49.50 sought by the company, while shares fell as much as 10% after trading began before recovering some ground.
For investors, the bigger story is the valuation reset. Shein was valued at around US$100 billion at the height of the e-commerce boom, making it one of the world’s most valuable private companies.
Its public-market valuation of about US$26 billion suggests investors are now applying a substantially higher discount to the growth prospects and risks attached to its business model.
Weak demand points to investor caution
Institutional demand ahead of the listing also appeared subdued, with reports suggesting only around 20% of shares offered to institutional investors were taken up before the flotation, compared with roughly 50% for heavily sought-after IPOs.
The muted response makes Shein’s listing a test of investor appetite for standalone online fashion businesses after several years in which enthusiasm for high-growth e-commerce companies has faded.
Aletheia Capital consumer and internet division head Nirgunan Tiruchelvam said Shein represented “the old tech, as opposed to the new tech”.
“Shein would have had a lot more traction with investors in the 2021 vintage. But the world has moved on from blockbuster e-commerce listings,” he said.
Growth model faces new pressures
Investors are also weighing whether Shein can maintain the growth that previously justified its lofty valuation.
Competition from TikTok Shop and other social-commerce platforms is intensifying, while Shein has been losing market share among younger US shoppers.
Retail Cities managing director Bryan Gildenberg said Shein and Temu were “getting caught up a little bit, particularly by TikTok”, which has combined entertainment with online shopping.
Regulatory changes are adding another challenge.
The removal of the US de minimis tariff exemption for low-value imports has increased costs for Shein’s core direct-to-consumer model, while similar measures are being introduced in Europe.
Those pressures have already begun feeding through to financial performance, with Shein recording a US$99 million first-quarter loss compared with a US$395 million profit in the corresponding period a year earlier.
