Shein Targets $40 Billion Valuation for Hong Kong IPO
Synopsis
Shein is targeting a valuation of US$30–40 billion for its planned Hong Kong IPO as investor meetings begin. The fast-fashion retailer aims to launch the offering as early as mid-August.
Key Highlights
- Shein aims for US$30 bil–US$40 bil valuation in Hong Kong IPO.
- The fast-fashion retailer could debut the offering as soon as mid-August.
- It is a large decline from its US$98.2 billion valuation in 2022.
Shein aims for a valuation between US$30 billion and US$40 billion as soon as mid-to-late August, when it is expected to debut in Hong Kong.
The company, based in Singapore, started pre-deal investor meetings last week. But that IPO valuation target and timeframe are still tentative, depending on feedback from potential investors. The size of the IPO, the offer price or the listing timetable have not yet been revealed.
Valuation Reset
The targeted valuation represents a significant decrease from Shein’s previous valuations, which hit US$98.2 billion in 2022, before falling to US$64 billion in early its funding round of 2023 and April 2024.
The draft IPO prospectus last month revealed Shein registered a quarterly loss of US$99 million, partly due to slower sales after the United States dropped its duty-free small package exemption and a US$328 million one-off fair-value accounting expense related to convertible redeemable preferred shares.
The filing drew attention as well to slowing revenue growth, reduced core earnings and profit margins, rising trade costs, greater regulatory scrutiny and the intensification of competition in global e-commerce.
Investor Meetings Underway
The company, which ships US$5 dresses and US$10 jeans to about 160 countries, is focusing on a valuation that can support the share price post-IPO rather than the biggest possible value.
Even so, one source said potential cornerstone investors had sought a valuation closer to US$30 billion or US$32 billion. Over the past week, Shein has also conducted investor meetings in New York, Boston and San Francisco.
Even a valuation in the range of US$30 billion to US$40 billion would see Shein rank broadly alongside H&M, whose value is around US$26 billion, but far below that of Fast Retailing (US$161 billion) and Inditex (US$208 billion).
Hong Kong Listing Plans
Shein is also trying to help some late-stage investors lower their investment costs, since the IPO valuation will likely be less than last private fundraising valuation, Wu added. They could pay out early investors and give more shares at lower conversion prices.
After failed listing efforts in New York and London, Shein secured a greenlight for its Hong Kong listing from the China Securities Regulatory Commission (CSRC) on July 10. IPO proceeds will go to technology investments and global brand-building, corporate responsibility initiatives, and general corporate purposes the company said.
Source: Reuters
At Inspirepreneurs Magazine, covering entrepreneurship, business failures, and the human stories behind the world's most ambitious founders. She writes at the intersection of strategy and storytelling.
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