Shein shares drop over 20% in first week after Hong Kong IPO

Shein's long-awaited arrival on the public markets has been met with a punishing reception. The Singapore-based fast-fashion giant listed on the Hong Kong Stock Exchange on Sept. 1 after raising US$1.7 billion in an IPO priced at HK$48.56 per share, valuing the company at roughly US$26 billion. Shares fell as much as 10% early on debut day before closing nearly flat at HK$48.50, then slid steadily through the week, ending around HK$38 by Sept. 4 — a decline of more than 20% from the listing price.straitstimes+2

The valuation marks a roughly 70% collapse from Shein's peak private-market valuation of nearly US$100 billion set in 2022.moneyweb+1

A Debut Years in the Making

Shein had initially sought to list in New York and then London, but both efforts were derailed by regulatory scrutiny over its supply chain and business practices. The company pivoted to Hong Kong, where the offering was backed by cornerstone investors including Tencent and Boyu Capital.news.futunn+1

"The lackluster IPO opening drop isn't really about Shein's execution but rather the unfortunate timing," Jeremy Tan, chief executive of Tiger Fund Management, told Bloomberg. "Investors have continued to be relatively more bullish about the AI and robotics trades, as shown in recent strong IPO debuts."moneyweb

Vey-Sern Ling, managing director at Union Bancaire Privée, noted that Shein likely had little choice on timing. "Growth is slowing and losses rising amid stiff competition from both e-commerce and fast-fashion players. More critically, its business model continues to be disrupted by evolving international regulations," he said.moneyweb

Headwinds on Multiple Fronts

Shein reported a net loss of US$99 million in the first quarter of 2026, compared with a US$395 million profit in the same period a year earlier. Revenue growth slowed to 8% in 2025, well below its 21% increase in 2024 and a far cry from 250% growth during the pandemic.straitstimes+1

A key blow came from the end of the US de minimis trade exemption, which had allowed small-value imports to enter duty-free. The European Union followed in July with its own abolition of the exemption. Meanwhile, France recently enacted legislation imposing per-item levies on ultra-fast fashion, with charges set to rise to as much as €19.50 per garment by 2030. Beijing has called the French law "clearly discriminatory" and warned it would take measures to defend Chinese firms.moneyweb+1

ESG concerns have also shadowed the listing. A 2025 Greenpeace investigation found hazardous chemicals exceeding EU limits in 32% of Shein garments tested, while a BBC investigation the same year documented workers operating sewing machines for roughly 75 hours a week.euronews

What Comes Next

Shein now trades at over 15 times forward earnings, roughly double the multiple commanded by rival PDD Holdings ↘ 1.43% and above the Hang Seng Index's 10.7 times, according to Bloomberg Intelligence estimates. Competition from PDD's Temu and Alibaba's ↘ 4.74% AliExpress continues to intensify.moneyweb

Achim Berg, founder of advisory firm FashionSights and former global head of McKinsey's apparel practice, said the $100 billion valuation was set "in a very different world" and that Shein's old playbook is getting harder to run. "The real question is whether Shein's extraordinary rise from virtually zero to $42 billion in revenues can translate into profitable future growth," he said.moneyweb