Shein Valued at $26.5 Billion Ahead of Hong Kong IPO Raising $1.7 Billion
Shein, the popular fast-fashion online retailer favored by Israeli consumers, is preparing for its initial public offering (IPO) in Hong Kong, expected to price near the midpoint of its proposed range. According to sources cited by Reuters on Thursday, the company aims to raise approximately $1.7 billion, setting its valuation at about $26.5 billion. The shares are anticipated to be priced at 48.56 Hong Kong dollars each, within the original range of 47.60 to 49.50 HKD, resulting in a total raise of around 13.6 billion HKD ($1.73 billion).
This valuation marks a significant decline from Shein's peak private market value of nearly $100 billion in 2022 and is substantially lower than the $66 billion valuation from a 2023 funding round. Founded in China and now headquartered in Singapore, Shein launched its Hong Kong IPO on Monday, with the order book reportedly fully subscribed by Tuesday. This move follows four unsuccessful attempts to list on the New York and London stock exchanges.
Shein gained global recognition for selling affordable clothing, such as $5 dresses and $10 jeans, across roughly 160 countries. However, it has faced regulatory challenges and competitive pressures in key markets like the US and Europe in recent years. The company plans to announce its final offering price on August 31, with trading expected to begin the following day.
Anchor investors, including existing shareholders Boyu Capital, Tiger Global, and General Atlantic, have committed to purchasing about $383 million in shares. Other prominent financial institutions such as Tencent, Greenwoods, Taikang Life, and UBS Asset Management will also participate in the offering. Shein intends to allocate approximately 80% of the proceeds to upgrading its technological infrastructure and expanding its brand and global presence. Additionally, the company has pledged up to $3.5 billion in cash payments to certain investors who acquired special shares in earlier private funding rounds.
The IPO comes amid a challenging period for Shein, which is experiencing slowing revenue growth, declining profits, and shrinking margins. The company expects first-half revenue growth to mirror the modest 1.1% increase seen in the first quarter, with a slight decrease in operating profit margins. These trends are compounded by rising trading costs, increased regulatory scrutiny, and intensifying competition in the retail sector.
