Fast-fashion giant Shein is reportedly making progress on its Hong Kong initial public offering (IPO), with plans to reserve at least $400 million worth of shares for cornerstone investors. Asian private equity firm Boyu Capital and UBS Group's asset management division are actively negotiating to participate as cornerstone investors in the offering.
Chinese internet company Tencent and private equity firm General Atlantic are also said to be evaluating subscribing to shares. Shein has further approached E Fund Management, Greenwoods Asset Management, and Tiger Global to gauge their interest in becoming cornerstone investors. Cornerstone investors typically receive guaranteed share allocations but must agree to a lock-up period, usually six months. Many of the potential cornerstone investors are already existing Shein shareholders.
Shein is targeting August 24 to begin accepting subscriptions, with a listing expected around September 1. The company aims to raise approximately $2 billion, seeking a valuation between $26 billion and $27 billion. This valuation marks a significant drop from its peak of nearly $100 billion in 2022, reflecting shifts in the fast-fashion industry and capital markets.
The potential participation of a diverse group of investors, including private equity firms, asset managers, internet giants, and public funds, highlights the market's interest in Shein despite its reduced valuation. General Atlantic and UBS Group declined to comment, while Shein, Boyu Capital, E Fund Management, Greenwoods Asset Management, Tencent, and Tiger Global did not immediately respond to requests for comment. Shein's move to Hong Kong for its IPO follows increased U.S.-China tensions and a tightening U.S. regulatory environment, with a successful listing poised to boost the Hong Kong IPO market.
