Fast-fashion retailer Shein made its highly anticipated trading debut on the Hong Kong stock exchange, with shares initially slumping by as much as 10%. The Singapore-headquartered company, once valued at nearly $100 billion in 2022, went public at HK$48.56 per share, valuing the business at just over $26 billion. This marks a significant 70% drop from its peak valuation, following previous unsuccessful attempts to list in the U.S. and UK. The flotation raised HK$13.6 billion by selling 280 million shares.
The stock later recovered most of its early losses, closing at HK$48.50, only 0.12% down from its opening price. However, some reports indicate a closing price 0.10% lower or even 8% down for the day, reflecting a lukewarm investor reception. Analysts like Charu Chanana, chief investment strategist at Saxo, noted that even after a substantial valuation reset, investors didn't perceive Shein as obviously cheap. The company's valuation of $26 billion is comparable to H&M, while Zara owner Inditex has a market capitalization of about $213 billion.
Investor concerns stem from various factors, including geopolitical headwinds, plateauing growth, and intense scrutiny of its business practices in Western markets. Shein's net income slid 39% in 2025 and it swung to a $99 million loss in the first quarter of 2026, primarily due to the U.S. scrapping an import duty exemption on small packages. Its 2025 net revenue of $41.8 billion was above H&M's $23 billion but slightly below Inditex's $45.5 billion, with revenue growth at 8% in 2025, a sharp slowdown from 21% in 2024. Competition from rivals like Temu is also intensifying.
The IPO itself was not met with strong demand; the retail tranche was subscribed 5.63 times and the international portion 2.59 times, which is modest compared to other high-profile offerings. The offering represents about 6.6% of Shein's enlarged share capital, with cornerstone investors taking about one-fifth and locked up for six months. This IPO serves as a crucial "capital-structure event" for Shein, helping to compensate early investors who had invested at much higher valuations, with the company agreeing to make cash payments totaling about $3.5 billion and share adjustments to some preferred shareholders.
Experts suggest the weak debut indicates investors are looking for concrete evidence of performance rather than just promises. Ken Pucker, a sustainable fashion expert, pointed out that Shein's unprecedented growth brought challenges like new taxes, compromised sustainability, and competition. Kelvin Lam, a China-focused economist, believes that going public now was necessary, as delaying further might have led to missing the opportunity due to increasing global protectionism and regulatory pressures. Juozas Kaziukenas, an e-commerce analyst, forecasts negative growth for Shein in the near future, emphasizing the need for a "mid-air engine swap" to diversify its supply chain beyond direct shipping from China.
