Shein is targeting a Sept. 1 listing in Hong Kong at a valuation of about $26 billion to $27 billion, according to sources cited by SCMP, as the fast-fashion retailer prepares for an initial public offering that would value the company at less than a third of its peak private-market valuation.
The Singapore-headquartered online retailer plans to launch its Hong Kong IPO on Monday, one source familiar with the matter said, with two other sources saying the company is targeting Sept. 1 for the listing. The date remains subject to change, and the listing could take place several days later, one of the sources said. Shein had previously been targeting early August and later an Aug. 28 listing.
The delay, first reported by the South China Morning Post, comes as slower growth and rising costs have made investors more cautious about the company’s prospects.
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Shein emerged as one of the most disruptive names in global fashion by combining ultra-low prices with a highly responsive supply chain that allowed it to rapidly introduce new designs and respond to changes in consumer demand. Its model helped the company compete with established retailers such as H&M and Zara while building a large international customer base.
But the conditions that supported its rapid expansion have become more challenging. Slower growth and higher operating costs have reduced the premium investors are willing to place on the business, putting pressure on Shein to accept a much lower valuation in the public market.
The targeted $26 billion to $27 billion valuation is a dramatic reduction from the $100 billion valuation Shein secured in a private fundraising round in 2022. The company had earlier sought a valuation of between $30 billion and $40 billion when investor meetings for the IPO began, making the latest target another indication of how sharply expectations have changed.
The valuation would also place greater emphasis on Shein’s ability to sustain growth and improve profitability as a listed company, rather than on the rapid expansion that drove its private-market valuation several years ago.
UBS Group’s asset-management arm is among the cornerstone investors expected to participate in the IPO, according to a source with direct knowledge of the matter. It would be the first time the asset manager invests in Shein, the source said.
Several of Shein’s existing shareholders are also in discussions to participate as cornerstone investors, although the final list has not been completed, according to the source and another person familiar with the process.
Cornerstone investors typically commit to purchasing a specified amount of shares before an IPO and agree to lock up those holdings for a defined period. In Shein’s case, the lock-up period is six months, according to the sources.
The involvement of major institutional investors could provide support for the offering at a time when Shein is seeking to establish a public-market valuation significantly below its previous private-market peak.
The company is also considering measures to reduce the investment cost for some of its early backers. Public filings show that Shein may offer payouts to existing investors and issue additional shares at a lower conversion price for their holdings. Such measures could help ease the impact of the lower IPO valuation on early investors, although they also highlight the substantial gap between the company’s previous private valuation and what public-market investors appear willing to pay.
Shein’s path to a Hong Kong listing has also been closely watched because of the company’s global footprint and its evolution from a fast-growing online retailer into a major player in the international fashion market.
The IPO would give investors a more transparent way to assess the company’s financial performance after years in which its valuation was largely determined through private fundraising rounds.
The lower valuation target could make the offering more attractive to new investors by reducing the price paid for Shein’s future growth. But it also raises questions about whether the company’s earlier growth trajectory can be restored as competition intensifies and the costs associated with operating its global supply chain rise.
Overall, Shein’s Hong Kong listing would mark a significant transition from a privately held technology-driven retailer to a publicly traded global consumer company. Industry analysts expect the success to be spurred by investors’ belief in the company’s business model’s ability to deliver sustainable growth and margins at a substantially lower valuation.