Shein, the online fast-fashion giant, is aiming for a significantly reduced valuation in its upcoming Hong Kong IPO, with estimates ranging from $25 billion to $40 billion. This marks a dramatic decrease from its peak valuation of nearly $100 billion in a 2022 fundraising round, and also lower than the $64 billion valuation in 2023 and April 2024. The company's attempts to list in New York and London previously failed, and the current Hong Kong offering reflects a less optimistic market and internal challenges.
The sharp reduction in valuation is attributed to several factors. Shein's growth has slowed considerably, with revenue increasing only 8% to $41.8 billion in 2025, a deceleration from 20.7% growth a year earlier. Profitability has also suffered, with net profit falling 38.7% from $3.37 billion to $2.06 billion in 2025. In the first quarter of 2026, Shein swung to a $99 million net loss, compared to a $395 million profit in the same period the previous year. This loss included a $328 million accounting charge for special investor shares, but also reflected a decline in U.S. revenue from $2.38 billion to $2.04 billion.
Regulatory hurdles have significantly impacted Shein's business model. The removal of a "de minimis" tariff exemption in the U.S. in May last year, which previously allowed Shein to ship small packages from China directly to customers without standard import duties, has increased costs and affected its direct-to-consumer model. Analysts like Kenny Ng of Everbright Securities International noted that the valuation cut primarily reflects concerns about Shein's declining profits and its reliance on small-parcel tariffs.
Market sentiment has also shifted away from high-growth, technology-enabled fast-fashion platforms. Investment strategists like William Ma of GROW Investment Group and Shaun Rein of China Market Research Group believe Shein missed its "golden time" to go public. The current Hong Kong market, according to Lenny Zephirin, principal and analyst at The Zephirin Group, is more interested in AI, semiconductors, and cloud infrastructure, not apparel retailers. Analysts are increasingly valuing Shein more like a traditional clothing retailer rather than a tech disruptor, leading to lower price-to-sales multiples compared to peers like H&M ($26 billion) and significantly lower than Inditex ($208 billion) or Fast Retailing ($161 billion).
