HONG KONG, Aug 24 (Reuters) – Online fast-fashion retailer Shein’s valuation has crumpled by about 70% from a private market peak of nearly $100 billion four years ago, as it looks to raise up to HK$13.86 billion ($1.77 billion) in a Hong Kong IPO launched on Monday.
Shein is selling 280 million shares priced between HK$47.60 and HK$49.50, valuing it at close to $27 billion at the top of the range. The valuation has dropped from private fundraising rounds that valued it at $98.2 billion in 2022.
Here are some comments from analysts.
DICKIE WONG, EXECUTIVE DIRECTOR OF RESEARCH AT USMART SECURITIES, HONG KONG:
“Honestly, I’m not that positive on the Shein IPO. Their growth has slowed down a lot already. The big problem is the U.S. already cancelled the de minimis exemption, so those small packages under $800 now have to pay tariffs, and Trump can keep that going. On top of that, Temu is competing really hard on price and product range, and Amazon also launched Amazon Haul to fight in the same space.”
“I expect the subscription response to be just average. While the valuation has come down significantly, I would not recommend subscribing at this stage given the slower growth outlook and regulatory pressures. An average response would suggest investors remain selective toward large cross-border e-commerce names.”
MAY ZHAO, INVESTMENT DIRECTOR AT STAR RIVER SECURITIES, HONG KONG:
“Shein’s offering ratio is only 6.59% of its total shares, which is relatively low, and the deal also comes with a greenshoe option. The company has cut valuation for multiple times. Based on its 2025 earnings, the stock is valued at around 12 to 13 times P/E, providing some valuation support. As such, we do not expect the shares to trade below the IPO price on their debut.”
WEIHENG CHEN, SENIOR PARTNER AND HEAD OF GREATER CHINA, LAW FIRM WILSON SONSINI, HONG KONG:
“Shein may be viewed by many investors as a boomer stock in today’s market as compared with the AI and other Gen Z stocks. Its business performance and valuation also deteriorated during the years of prolonged IPO process.”
NIRGUNAN TIRUCHELVAM, HEAD OF CONSUMER AND INTERNET AT ALETHEIA CAPITAL, SINGAPORE:
“It (the valuation drop) shows that the enthusiasm with which investors viewed e-commerce players such as Shein (and) the so-called myriad of baby Amazons that continue to be active, has completely shifted from the heady days of 2020-22 during the pandemic to what it is today.”
LORRAINE TAN, DIRECTOR OF EQUITY RESEARCH FOR ASIA, MORNINGSTAR, SINGAPORE:
“The drop in Shein’s valuation largely reflects the change in prospects for the company from say 2-3 years ago when its IPO was first mooted. Firstly, the added U.S. tariffs are hurting sales and dent (the) future growth outlook; and secondly, there is increased competition – notably with PDD’s Temu. Margins have slipped as a result and the company made a quarterly loss. We believe interest in Shein by global investors has probably cooled as a result, leading to the reduced listing price.”
GARY TAN, PORTFOLIO MANAGER, ALLSPRING GLOBAL INVESTMENTS, SINGAPORE:
“The lower valuation suggests investors increasingly view Shein as an internet platform, a sector whose multiples have compressed amid AI disruption concerns.”
JASON CHAN, STRATEGIST, BANK OF EAST ASIA, HONG KONG:
“It’s a bit late for Shein to pursue an IPO. For the past two to three years, China’s domestic consumer consumption has been quite weak despite different types of incentives, and for its overseas business the tariff risk is also a big overhang, so this valuation cut is pretty reasonable. The best timing might be three to five years ago and it had already missed that.”
KENNY NG, STRATEGIST AT CHINA EVERBRIGHT SECURITIES INTERNATIONAL, HONG KONG:
“Shein launched … with a valuation that has fallen significantly compared to earlier years.”
“In my view, these challenges stem from three main areas: trade protectionism (tariffs) across different countries or regions, downward pressure on the global economy affecting consumer sentiment, and fierce competition within the industry.”
“I believe the fact that pre-IPO investors entered at a higher valuation than the current IPO offering price will weigh on the overall investment sentiment for Shein’s ongoing bookbuilding.”
WINSTON MA, PROFESSOR AT NYU SCHOOL OF LAW AND FORMER NORTH AMERICA HEAD OF CHINA’S SOVEREIGN WEALTH FUND CIC:
“Shein’s $27 billion valuation targets a new equilibrium.
“Public investors are no longer paying for hyper-growth; they are underwriting a mature cross-border platform that must now defend its profit margins against trade tariffs, higher compliance costs, and regulatory scrutiny in both US and China.
“Also on valuation, Shein is experiencing its ‘Zoom moment.’ Just like Zoom, Shein’s COVID-era business model is now being tested by the new market, where investors have aggressively rotated into AI stack-related investments.
“Robust demand would affirm Hong Kong’s role as the pragmatic listing venue for large consumer and e-commerce names that face hurdles elsewhere.”
KENNETH GOH, DIRECTOR OF PRIVATE WEALTH MANAGEMENT, UOB KAY HIAN, SINGAPORE:
“Shein is selling equity in Hong Kong while the hyperscalers borrow in global investment grade credit. Direct crowding out is hard to argue.
“Hong Kong and the mainland have seen two listings this month worth comparing. Unitree is raising about $900 million at a $9 billion valuation and says its retail tranche was more than 8,000 times covered. Shein is raising $1.77 billion with cornerstones drawn largely from its own existing shareholders.”
“Investors who attended the presentations said Shein leaned on operational technology without the growth story now attracting capital to AI-linked businesses. The scarce resource is willingness to underwrite something that has to be explained from scratch.”
(Reporting by Yantoultra Ngui, Kane Wu, Summer Zhen and Jiaxing Li in Hong Kong, Rae Wee and Ankur Banerjee in Singapore; Editing by Sumeet Chatterjee, Clarence Fernandez and Thomas Derpinghaus)
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