HONG KONG: Shein Global Holdings Ltd is seeking to raise as much as 13.9 billion Hong Kong dollars (US$1.77bil) in its Hong Kong initial public offering (IPO), as it enters the final stretch of an arduous journey to go public.
The fast-fashion retailer is offering 280 million shares at 47.6 Hong Kong dollars to 49.5 Hong Kong dollars each, according to a filing to the stock exchange Monday.
That would give it a market capitalisation of about US$25.7bil to US$26.8bil, with the company due to debut on the Hong Kong stock exchange Sept 1.
Such a valuation would make Shein one of the top fashion and apparel companies globally – behind Sweden’s Hennes & Mauritz AB, which is worth about US$31bil.
Still, the valuation is a fraction of the almost US$100bil Shein commanded in 2022 after an explosive growth fuelled by online shoppers during the pandemic.
Regulatory scrutiny had derailed Shein’s attempts to list in United States and London, and stricter tariffs have slowed growth.
Shein’s efforts to bolster its valuation and lure investors have included cushioning losses for late-stage backers.
Bloomberg reported Aug 3 that it considered lowering the cost for backers that came in at a valuation of up to US$64bil. The move would help lower the cost base from those investors to a roughly US$40bil valuation, closer to the planned IPO.
Shein’s IPO prospectus shows it swung to a loss of US$99mil in the first quarter of 2026 from a US$395mil profit a year earlier, while revenue has also been declining.
Cornerstone investors in the IPO include Boyu Capital, Tiger Global, General Atlantic, Tencent Holdings Ltd and UBS AM Singapore.
Boyu’s is the biggest commitment, at US$150mil, while Tiger Global is US$53mil and General Atlantic and Tencent are both US$50mil, according to terms of the deal.
Shein plans to use the IPO proceeds to enhance technology such as inventory management systems, invest in marketing to improve its image globally and expand brand awareness, promote corporate responsibility and general corporate purposes, it said.
Shein built its fast-fashion empire by offering ultra-cheap, trend-driven clothing, a model that encouraged shoppers to buy regular “hauls” and post them on social media.
The formula has come under pressure as US tariffs and the war in the Middle East have led to higher material costs and increased prices for consumers. Cost-of-living pressures globally have also prompted people to curb discretionary spending.
The company downplayed its Chinese roots over the years, moving its headquarters to Singapore in 2021 as it sought to position itself as a global retailer and ease regulatory concerns in Western markets.
But it was forced to change tack after regulators in China withheld their approval for the London IPO.
Regulatory hurdles and geopolitical risk will continue to be a challenge for the company. — Bloomberg
