Shein’s Hong Kong IPO Values Company at $26.5 Billion
Synopsis
Shein’s Hong Kong IPO values the fast-fashion giant at $26.5 billion, far below its 2022 peak, amid weak retail demand.
As per sources, fast-fashion company Shein is set to price its Hong Kong IPO shares at HK$48.56 apiece.
The price is near the centre of Shein’s indicated price range of HK$47.60 to HK$49.50. From the IPO, the company plans to raise approximately HK$13.6 billion ($1.73 billion). At this price, Shein would be valued at approximately $26.5 billion.
This is far below the nearly $100 billion valuation the company received in 2022. It is also significantly lower than the $66 billion valuation Shein reached in its 2023 funding round.
Investor Interest Is Mixed
Hong Kong, which started its IPO on Monday. By Tuesday, the entire share offer had been covered albeit without enthusiasm further down the capital structure from smaller investors, said Alvin Cheung at Hong Kong securities firm Prudential Brokerage.
Interest in new stocks has waned since the ASX (up 2.5% over the month) retreated on softer Asian markets in July, Cheung said. And with costs rising and competition increasing in online shopping, some investors fear Shein is nearing a plateau.
Shein’s final investor demand numbers will be published on Monday, the day before Serge Azria’s Hong Kong-listed shares begin trading. The level of investor demand was not released by Shein.
Shein Faces Slower Growth
Founded in China, Shein is now based out of Singapore. The firm sells cheap clothing across 160 different markets. For the past four years, the company has been attempting to get its shares listed in New York and London but most recently met with delays.
Shein is now facing slowing sales, declining earnings and shrinking margins. The business has also been pressured by higher costs, stricter rules and increased competition in the US and Europe.
Shein sees comparable revenue growth in the first half of 2026 to the 1.1% it reported in the first quarter. The operating profit margin is also projected to decline moderately.
How Shein Will Use the Money
Out of the funds it raises in the IPO, Shein says it intends to invest around 80% into its technology and global brand expansion.
The company is glad that new and former investors including Boyu Capital, Tiger Global and General Atlantic also plan to purchase nearly $383 million worth of shares. Update: Tencent, Greenwoods, Taikang Life and UBS Asset Management will also acquire shares.
Shein also agreed to pay cash of approximately $3.5 billion to certain investors who purchased special shares as part of private funding rounds. The IPO is being managed by Goldman Sachs, Morgan Stanley and JPMorgan. Other banks are Guotai Haitong, UBS, BofA Securities and HSBC.
Source: Reuters
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