Shein, the fast-fashion retailer, is set to launch its Hong Kong IPO, valuing the company at roughly $26.5 billion. This marks a significant 70% decline from its peak valuation of $100 billion in 2022 and less than half of its $66 billion valuation in 2023. The company aims to raise up to $1.8 billion by offering approximately 280 million shares at a price between HK$47.60 and HK$49.50 per share, with the final IPO price to be announced on August 31, and trading commencing on September 1.
This sharp reduction in valuation is attributed to several factors, including a marked slowdown in growth and intensifying competition from rivals such as PDD-owned Temu. Shein's revenue growth has slowed considerably, with first-half 2026 growth broadly in line with the 1.1% increase posted in the first quarter. Net profit also fell 38.7% to $2.06 billion last year, and the company posted a $99 million quarterly loss in the first quarter of this year, partly due to the removal of a U.S. import duty exemption on small packages and a $328 million accounting charge.
Analysts express skepticism about the IPO's appeal even at this reduced valuation. Lorraine Tan, director of equity research at Morningstar, noted that the drop reflects a change in the company's prospects from a few years ago, leading to cooled investor interest. Winston Ma, an adjunct professor at NYU School of Law, suggested that public investors are no longer paying for hypergrowth but are instead underwriting a mature cross-border platform facing challenges like trade tariffs, higher compliance costs, and regulatory scrutiny. Dickie Wong of uSMART Securities also advised against subscribing, citing the slower growth outlook and regulatory pressures, including a U.S. Federal Trade Commission investigation and EU Digital Services Act investigation.
Shein's U.S. apparel sales declined by 4.5% last year, and its market share in the U.S. slipped from 1.8% to 1.7%, marking the first decline since 2021. In the first quarter of this year, U.S. sales fell 14.3% year-on-year, and the U.S. share of total sales dropped from 29.4% in full-year 2023 to 22.5%. The company plans to use approximately 80% of the IPO proceeds to enhance its technology and expand its brand and global presence. Existing shareholders Boyu, Tiger Global, and General Atlantic, alongside new investors like Tencent and UBS Asset Management, have subscribed to approximately $383 million worth of shares.
