Shein’s Hong Kong IPO is set to value the fast-fashion retailer at approximately $26.5 billion, according to Reuters, less than a third of the $100 billion valuation the company commanded in 2022.
The online retailer aims to price shares at roughly $6.20, the midpoint of its targeted range, Reuters reported.
For founder Xu Yanguang, 43, the shrunken listing price carries a steep personal cost. His 30% stake leaves him with a net worth of about $8 billion at that level, a fall of more than $15 billion, according to the Bloomberg Billionaires Index.
Shein Hong Kong IPO arrives as investor appetite shifts to AI
Timing compounded Shein’s difficulties. Chinese consumer brands that went public over the past year initially attracted strong investor interest, but a run of artificial-intelligence listings stole momentum and minted new billionaires.
‘They definitely missed the window,’ said Sam Wyatt, an international-equities portfolio manager at U Ethical Investors in Melbourne. E-commerce, he added, is now a less attractive story to investors than AI.
The broader Hong Kong IPO market has produced mixed results. Beverage maker Eastroc Beverage Group and pig breeder Muyuan Foods are both trading below their listing prices after debuts that each exceeded $1 billion. The brothers behind bubble-tea chain Mixue Group have seen their wealth shrink by more than a fifth since the company went public.
Tariffs, labour scrutiny and a slowing growth story
Shein’s path to listing has been unusually tortuous. The company tried to go public in New York and London but faced scrutiny over its labour practices in both markets.
Xu started the business in 2012 with three partners, all of whom had worked at the same search-engine marketing firm. They built Shein into a global fast-fashion platform known for cheap, trend-driven clothing, with sales surging during the Covid-19 pandemic.
Revenue growth has slowed since then, according to data Shein disclosed ahead of its IPO.
One of Shein’s core commercial advantages (bypassing import taxes in the United States and Europe by shipping small parcels) was dismantled after the Trump administration ended a key tariff exemption and the European Union announced a fixed customs duty on small parcels.
‘The direction of the market is changing, not in Shein’s favour, especially in the recent years,’ said Sheng Lu, a professor in fashion and apparel studies at the University of Delaware. AI is also levelling the playing field for Shein’s competitors, who will be able to respond more quickly to changing consumer tastes, he added.
The company’s supply chain is rooted in China, though it relies on the US and Europe as key markets. Executives distanced the brand from its Chinese origins and moved global headquarters to Singapore, but ultimately required approval from Chinese regulators before the listing could proceed.
‘Shein was the hottest topic two to three years ago, a Chinese firm that could have IPO’ed in the US because it already had a strong fast-fashion brand in the US and strong consumer recognition,’ said Jason Hsu, chief investment officer at Rayliant Global Advisors. ‘But the hot topic now is AI.’
A Shein spokesperson did not respond to a request for comment.
Shares are due to begin trading in Hong Kong on Tuesday, with the company priced at roughly $6.20 per share, a figure that places the Shein Hong Kong IPO firmly at the lower end of expectations that once circled a $100 billion prize.
