Shein Shares Slide 10% in Long-Awaited Hong Kong Trading Debut

Shein’s long-awaited Hong Kong debut began with a sharp fall, as investors priced the fast-fashion retailer well below the heights it reached two years ago. The stock opened at HK$48.56, matching its IPO price, then dropped to HK$43.80, a decline of about 10%.

“

Never been bullish on this IPO. Revenue's not growing, and a lot of the money raised is basically going back to the earlier investors.

The listing raised $1.7 billion and gave Shein a valuation of $26.5 billion. That was far below its peak valuation of nearly $100 billion in 2022. Investor demand also looked modest by Hong Kong IPO standards: the retail tranche was subscribed 5.63 times and the international portion 2.59 times.

Dickie Wong, executive director of research at uSMART Securities, said he had not been bullish on the offering because revenue was not growing and much of the money raised would go to earlier investors. He also noted that the grey-market price had already fallen below the offering price and that the six-month lock-up for cornerstone investors offered little support.

“

Grey market already dropped below the offering price, cornerstone lock-up doesn't really help.

The listing caps years of efforts to take Shein public. The company’s attempts to list in New York and London were blocked by Chinese authorities after scrutiny of its business practices in Western markets. Its model also faces pressure from changes to low-value shipment rules. The United States ended the de minimis duty exemption for e-commerce packages under $800, and the European Union later imposed fees on low-value parcels.

“

The valuation reset reflects more than just slower growth.

Shein’s net income fell 39% last year, and the company recorded a first-quarter loss. It expects its first-half operating margin to decline slightly from the first quarter because of higher customs duties, tariffs, fees and logistics costs in Europe and the Middle East. The company is seeking new growth through a third-party marketplace, supply-chain services and the purchase of U.S. apparel brand Everlane, while analysts warn that weaker spending in developing markets could limit the benefit of expansion.

“

New markets could help offset slower growth in the U.S. and Europe, but lower spending power in developing markets may limit the benefit if delivery costs stay high.