Shein's shares experienced a sharp decline on their first day of trading on the Hong Kong Stock Exchange, falling below the initial offer price. The company set its IPO price at HK$48.56, raising HK$13.6 billion and valuing the fast fashion retailer at just over $26 billion. Early trading saw the stock drop as much as 10 percent before recovering slightly to trade around 4 percent lower.
This debut valuation represents a substantial decrease from Shein's peak. In 2022, the online fashion firm reached a valuation of $100 billion following a private fundraising round, driven by increased interest during the COVID-19 pandemic. However, the company has since faced challenges including weaker sales, rising costs, and changes to tariffs and duties in key markets like the United States and Europe.
Founded in China in 2012 and headquartered in Singapore since late 2021, Shein received approval to list in Hong Kong in July. At the opening gong ceremony, Shein Chief Financial Officer Leigh Gui stated, "As a new company listed in Hong Kong, we will continue to innovate, optimise, and cooperate with our supply chain partners for mutual benefit and win-win results." Founder and CEO Sky Xu did not address the ceremony.
Previous attempts by Shein to list its shares in London and New York were unsuccessful, encountering opposition from politicians and regulators due to scrutiny of its supply chain practices. The company's pursuit of a London listing was reportedly stalled amid allegations of human rights abuses within its supply chain.
Shein reported a net loss of $99 million in the first quarter of the year. Its sales have also been impacted by policy changes, including the U.S. President Donald Trump's decision to eliminate the 'de minimis' tariff exemption for small packages. The European Union implemented a similar measure in July, introducing a €3 duty on small parcels imported from outside the trading bloc.
Analysts noted the weak market reception. Charu Chanana, chief investment strategist at Saxo, commented, "I think the weak debut shows that even after the huge valuation reset, investors still don't see Shein as obviously cheap."