Key facts
- China's securities regulator has approved fast-fashion retailer Shein's IPO in Hong Kong.
- The approval clears the path for a listing that previously faced significant delays and setbacks in both New York and London.
- Shein is likely to aim for its Hong Kong IPO in September or October.
- The company's potential IPO valuation is estimated between $40 billion and $50 billion.
China has approved fast-fashion retailer Shein's long-awaited initial public offering in Hong Kong, according to a notice posted on the China Securities Regulatory Commission (CSRC) website. This approval clears the path for a listing that previously faced significant delays and setbacks in both New York and London.
Shein and its advisors are considering launching the IPO in the coming months, with the company potentially aiming for a valuation between $40 billion and $50 billion. This valuation would be considerably smaller than its main rival Temu's parent company, PDD Holdings, which has a market capitalization of $117 billion, but double the size of H&M.
The online retailer had waited a year for the green light from Beijing, which views Shein as politically sensitive. The company's previous attempts to list in the U.S. were stalled due to resistance from lawmakers and regulators concerning its supply chain and labor practices. After the U.S. filing stalled, Shein turned to London, but China's CSRC withheld its approval.
Shein, founded by Chinese-born entrepreneur Chris Xu in 2012, moved its headquarters to Singapore in 2022 but remains subject to Chinese IPO rules due to its substantial network of third-party suppliers in China. The company's business model of buying clothes in China and shipping them by air direct to consumers has been challenged by efforts to close customs loopholes and apply duties to cheap parcels.
A successful listing in Hong Kong would mark a boon for the city, which has emerged as a top listing location globally. The CSRC has cleared over 180 other IPOs in the last 12 months, fueling a boom for the city's equity capital markets.