Shein seeks up to $40B valuation in Hong Kong IPO

Shein is seeking a valuation of $30 billion to $40 billion in a Hong Kong initial public offering it plans to launch as early as mid-August, Reuters reported on Tuesday, citing three people familiar with the matter. The target represents a steep markdown from the $98.2 billion valuation the online fast-fashion retailer achieved in 2022 and the $64 billion it commanded in private fundraising rounds in 2023 and April 2024.reuters

The Singapore-headquartered company, which was founded in China, started pre-deal investor meetings last week in New York, Boston, and San Francisco, according to the sources, who declined to be named because the plans are confidential. Some potential cornerstone investors are pushing for a valuation closer to $30 billion or $32 billion, with Shein prioritizing a price that can support its shares after listing rather than maximizing the headline number.techcentral+1

Sweeteners for Late-Stage Investors

To cushion the blow for backers who invested at higher valuations, Shein is offering guaranteed cash payouts and adjusted share terms, according to filings with the Hong Kong Stock Exchange. Investors in the company's Pre-D, D, and D+ funding rounds will receive a guaranteed annual return of 8 percent on their original investments, totaling approximately $1.1 billion. The payments are due in three equal installments by the end of March, June, and September 2026.insideretail

Additionally, preferred shareholders will see their shares automatically convert into Class B ordinary shares upon listing, with the conversion price adjusted downward if the IPO prices below what they originally paid — effectively granting them more shares to compensate for the valuation decline.tekedia

Slowing Growth Clouds the Outlook

The draft prospectus filed last month revealed Shein swung to a $99 million net loss in the first quarter of 2026, compared with a $395 million profit a year earlier, on revenue that grew just 1.1 percent to $9.05 billion. The loss included a $328 million fair-value charge on convertible preferred shares, but even stripping that out, operating profit fell 26 percent and margins narrowed.fashionunited+1

The removal of the U.S. de minimis import exemption in May 2025, which had allowed parcels worth less than $800 to enter duty-free, has weighed on American sales — down 14 percent in Q1 — while a new EU customs duty of three euros per item on low-value consignments took effect on July 1, 2026. Europe overtook the United States as Shein's largest market in 2025, accounting for 35.4 percent of revenue.techeconomy+1

Shein received approval from the China Securities Regulatory Commission for the Hong Kong listing on July 10, clearing the path after failed attempts to list in New York and London. At the top of its target range, the company would be valued roughly alongside H&M but far below Inditex Industria de Diseño Textil, S.A. at about $208 billion and Fast Retailing at about $161 billion.reuters+1