Shein Debuts on Hong Kong Stock Exchange at Fraction of Peak Valuation

Ultrafast fashion retailer Shein has made its stock market debut on the Hong Kong Stock Exchange with a valuation of approximately 22.7 billion to 22.9 billion euros. This figure represents a significant decline from the company's peak valuation of 100 billion dollars in April 2022. The final share price was set at 48.56 Hong Kong dollars, or roughly 5.34 euros, which falls in the middle of the company's predicted price range. Shein expects to raise nearly 1.5 billion euros through the sale of approximately 280 million shares, representing about 6.5 percent of its capital.

Several factors have contributed to the company's diminished valuation. New import taxes on overseas packages in the United States and the European Union have pressured Shein's low cost business model. In the U.S. revenue reportedly decreased by 14 percent following the end of certain import exemptions. Additionally, the company faces stiff competition from Temu, which launched a similar marketplace model that hindered Shein's own expansion into non clothing categories. Financial reports also indicate a recent downturn in profitability, with the company reporting a net loss of 99 million dollars in the first three months of the current fiscal year, compared to a profit of 395 million dollars during the same period the previous year.

Despite these challenges, the IPO saw strong demand, with the Hong Kong issuance oversubscribed by 5.63 times. Anchor investors include existing shareholders such as Tiger Global and Tencent, as well as new investors like UBS Asset Management. However, pre debut trading saw shares fall by more than 10 percent.