Shein, the online fast-fashion retailer, is planning to launch its Hong Kong initial public offering (IPO) with a target of raising $2 billion to $3 billion. The company is aiming for a valuation of around $25 billion to $27 billion, a substantial decrease from its nearly $100 billion valuation in a share sale four years ago. Some reports indicate a valuation target of $30 billion to $40 billion, though pushback from investors may lead to further reductions.
The IPO launch is expected around August 24, with a target listing date of September 1, though it could be a few days later due to minor delays in investor orders. This debut follows unsuccessful attempts to go public in New York and London. UBS is noted as one of the cornerstone investors in the offering.
The reduced valuation reflects several challenges, including slower growth, regulatory scrutiny, and increased competition from rivals like PDD Holdings Inc.'s Temu. Shein also experienced a $99 million quarterly loss due to declining sales after the U.S. removed an import duty exemption on small packages, and a $328 million fair-value charge on convertible redeemable preferred shares following an accounting change. The company has indicated to prospective investors that it expects net income to drop this year before recovering closer to last year's $2.06 billion in 2027.
Analysts note that the valuation cut primarily stems from Shein's profit decline last year and the strong link between its e-commerce model and small-parcel tariffs. The targeted valuation places Shein broadly alongside H&M, which is worth about $26 billion, but well below Fast Retailing at $161 billion and Zara parent Inditex at $208 billion. Shein is attempting to position itself as a peer to Inditex and H&M, with Morgan Stanley projecting higher net profit growth for Shein between 2025 and 2028 compared to these established brands. The planned price-to-sales multiples for Shein are considered conservative due to lower profit margins and weaker earnings visibility.
