Shein set to debut on Hong Kong exchange Tuesday at $26.5B valuation

The fast-fashion giant Shein will begin trading on the Hong Kong Stock Exchange on Tuesday, capping a years-long effort to go public that took the company from New York to London before landing in the Asian financial hub. The listing will raise about $1.7 billion at a valuation of roughly $26.5 billion — a fraction of the $100 billion the company was worth at its private-market peak in 2022.france24+1

A Long Road to Market

Shein priced its IPO at HK$48.56 per share, near the midpoint of its HK$47.60 to HK$49.50 marketed range, selling 280 million shares for total proceeds of about HK$13.6 billion. The company had initially targeted an August 28 debut before pushing it back to September 1 amid softer investor demand.finance.yahoo+3

Founded in China in 2012, Shein moved its headquarters to Singapore in late 2021 and spent years presenting itself as a global company while pursuing listings in New York and London. Both attempts failed after Chinese regulators, including the China Securities Regulatory Commission, declined to grant approval, according to Reuters. Chinese regulators finally approved the Hong Kong offering on July 10.qz+1

Embracing Its Chinese Identity

To secure Beijing's blessing, Shein's founder Sky Xu became more personally involved in outreach to Chinese authorities, pledging $1.5 billion of investment at a business forum in Shein's manufacturing heartland earlier this year and opening a research and development center in Nanjing. Officials in Guangdong province promoted the company to central government authorities as a major employer, while Shein argued that its overseas-only sales model brings dollars into China without fueling the domestic e-commerce price wars that regulators have sought to rein in.irishexaminer

Beijing now views Shein as "a national champion deserving of support in an increasingly hostile external environment," a source with knowledge of the matter told Reuters.irishexaminer

Discounted but Determined

At its IPO price, Shein trades at about 13 times trailing earnings, a discount to rivals Inditex Industria de Diseño Textil, S.A., H&M Hennes & Mauritz AB, and Fast Retailing. The company has agreed to pay up to $3.5 billion to pre-IPO investors whose shares included protections against a steep markdown — roughly double what the IPO itself raised, according to Bloomberg.channelnewsasia

Shein plans to devote 40 percent of proceeds to technology and investments aimed at strengthening the southern China supplier network that underpins its ultra-fast-fashion model. With growth slowing in the United States and Europe due to rising protectionism and the end of the de minimis duty exemption for low-value shipments, the company is pitching investors on a future built around licensing its manufacturing capabilities to other brands.bloomberg+1