Global Market: Shein valuation falls 70% from peak as Hong Kong IPO targets $1.77 billion

Online fast-fashion retailer Shein is set to raise up to HK$13.86 billion ($1.77 billion) through its Hong Kong IPO, with its valuation falling sharply from its private-market peak as investors take a more cautious view of its growth prospects.

Shein launched its Hong Kong IPO on Monday, offering 280 million shares at HK$47.60 to HK$49.50 apiece. At the upper end, the company would be valued at nearly $27 billion.

The valuation is around 70% below the nearly $100 billion level Shein reached in 2022. The company was valued at $64 billion in 2023 and again in April 2024.


The China-founded, Singapore-headquartered company is scheduled to announce the final IPO price on August 31, with shares expected to begin trading in Hong Kong on September 1.

Shein had initially targeted a valuation of $30 billion-$40 billion ahead of the listing. The lower valuation reflects concerns over slowing growth, rising costs, trade pressures and increased regulatory scrutiny.

Winston Ma, an adjunct professor at New York University School of Law and former North America head at China’s sovereign wealth fund CIC, said public-market investors are placing greater emphasis on profitability and the ability to withstand higher costs rather than paying premium valuations for rapid growth.

At the IPO valuation, Shein would trade at about 0.7 times forecast sales, according to LSEG data. That compares with about 0.4 times for European online fashion retailer Zalando, 1.1 times for H&M and roughly 4 times for Inditex, owner of Zara.

Cornerstone investors commit $383 million

Cornerstone investors led by existing shareholders Boyu, Tiger Global and General Atlantic have agreed to subscribe for about $383 million worth of Shein shares, according to the company’s prospectus. Tencent, Greenwoods, Taikang Life and UBS Asset Management are also participating.

Shein plans to use about 80% of the IPO proceeds to strengthen its technology infrastructure and expand its brand and global presence. The company has also agreed to pay up to about $3.5 billion in cash to certain investors that acquired special shares during earlier private funding rounds.

Shares offered in the Hong Kong IPO will carry one-tenth of the voting rights attached to founder-held shares. Co-founders Sky Yangtian Xu, Maggie Gu, Molly Miao and Tony Ren will retain control of about 90% of Shein’s voting rights.

Growth concerns weigh on outlook

The IPO comes as Shein faces slowing revenue growth, weaker core earnings and margin pressure. The company is also dealing with higher trade costs, tighter regulatory oversight and growing competition in global e-commerce.

Shein said in its prospectus that first-half 2026 revenue growth is expected to be broadly in line with the 1.1% increase recorded in the first quarter. Its operating margin is expected to be slightly below the first-quarter level.

The company attributed the pressure to new European import charges, pricing pressure and weaker demand in the Middle East linked to the Iran war.

Shein also swung to a quarterly loss of $99 million after the United States removed a duty exemption for small packages. It additionally recorded a $328 million fair-value charge related to convertible redeemable preferred shares following an accounting change.

The US de minimis rule had previously allowed packages worth less than $800 ordered online from China to enter the country without import duties. Shein said Chinese-origin products sold directly or through its marketplace and shipped to the US are now subject to tax rates ranging from 10% to 87.5%.

The company said higher duties and taxes in the US contributed directly to a 14.3% decline in its US revenue during the first quarter of 2026.

Regulatory and legal risks

Shein had set aside about $80 million at the end of March for ongoing legal and regulatory matters, according to its prospectus. These include a US Federal Trade Commission investigation, an EU Digital Services Act investigation and data privacy cases in France and Ireland.

Shein’s $80 million acquisition of US clothing brand Everlane in May is also facing a national security review by the Committee on Foreign Investment in the United States (CFIUS).

Hong Kong IPO market gains momentum

Shein’s offering is the largest new share sale in Hong Kong so far in 2026, surpassing autonomous-driving company Momenta Global’s $751 million IPO in July.

The deal is also the third-largest IPO in Asia this year, behind Chinese onshore listings by CXMT and China Resources New Energy, which raised $9.8 billion and $3.6 billion, respectively.

Hong Kong IPOs have raised about $41 billion so far this year, a record for the period and more than double the roughly $17 billion raised during the same period a year earlier.

Shein’s listing will test investor appetite for large consumer and technology-linked offerings while putting the spotlight on whether the fast-fashion retailer can revive growth and rebuild the valuation premium it commanded in private markets.

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