Shein wins China's approval for Hong Kong IPO after New York, London setbacks

Fast-fashion giant Shein has secured approval from China for its long-anticipated initial public offering in Hong Kong, according to a notice on the China Securities Regulatory Commission (CSRC) website. This decision clears the path for a listing that had previously stalled in both New York and London.

The online retailer has been awaiting Beijing's endorsement for over a year. Sources indicate that the IPO required clearance from the highest levels of the Chinese Communist Party, partly due to Shein's political sensitivity and past controversies, including a sex doll scandal and reports of poor labor practices among its suppliers in China.

Shein's valuation has fluctuated significantly. Once valued at up to $100 billion in 2022, its last private fundraising round in May 2023 valued it at $66 billion. The company is now reportedly aiming for a valuation of $40 billion to $50 billion in its Hong Kong IPO, which would still position it as a major player, though smaller than rival Temu's parent company, PDD Holdings.

Founded by entrepreneur Sky Xu in 2012, Shein's journey to a public listing highlights the complex interplay of geopolitics and capital markets for Chinese firms. After facing resistance from U.S. lawmakers and regulators and gaining conditional approval in London, Shein's protracted struggle underscores Beijing's tightened grip on major entrepreneurs and its increased oversight of offshore listings, particularly since the halt of Ant Group's IPO in 2020. New CSRC rules allow vetting and blocking of offerings deemed a threat to national interests, even for companies like Shein that have moved their headquarters abroad but maintain significant operations within China.