Shein, the fast-fashion online retailer, experienced a disappointing stock market debut in Hong Kong, with its shares falling by as much as 10% after opening. The company priced its shares at HK$48.56 ($6.19) each, raising approximately $1.7 billion and valuing the business at $26.5 billion. This valuation is a substantial drop from its peak of nearly $100 billion in 2022, reflecting significant investor apprehension regarding its future prospects. Despite an initial plunge, the shares recovered some ground to close at HK$48.50, almost flat from its IPO price.
The lackluster demand for Shein's stock is attributed to several factors, including increased competition, geopolitical pressures, and growing scrutiny over its sustainability and labor practices. A major blow to its business model has been the removal of "de minimis" import duty exemptions in the U.S. and the EU on low-value parcels. This change has led to higher logistics and operational costs, impacting its sales and profitability. The company reported a net income plunge of 39% in 2025 and swung to a loss of $99 million in the first quarter of this year, compared to a net income of $395 million in the same period last year.
Analysts have expressed skepticism about the IPO. Dickie Wong, executive director of research at uSMART Securities, noted that "Revenue’s not growing, and a lot of the money raised is basically going back to the earlier investors." James Ooi, market strategist at Tiger Brokers, questioned the sustainability of Shein's growth, highlighting that "marketing expenses rising faster than revenue in 2025." The IPO was subscribed 5.63 times in the retail tranche and 2.59 times in the international portion, considered tepid compared to other high-profile deals. The amount sold in the IPO represents about 6.6% of Shein’s enlarged share capital, with cornerstone investors locking up about one-fifth for six months, leaving only about 5% freely tradable. The company also agreed to make cash payments totaling about $3.5 billion to some preferred shareholders, compensating early investors.
