Key facts
- Shein is targeting a $30 billion to $40 billion valuation for its Hong Kong IPO.
- The IPO is planned for launch as early as mid-August.
- This valuation is a significant reduction from previous private fundraising rounds.
- Shein reported a quarterly loss of $99 million.
- The company received approval for its Hong Kong IPO from China's CSRC on July 10.
Shein is aiming for a $30 billion to $40 billion valuation for its Hong Kong initial public offering, with a potential launch as early as mid-August, according to sources familiar with the matter. This valuation represents a significant reset from previous private fundraising rounds, which valued the company at $98.2 billion in 2022 and $64 billion in 2023 and April 2024.
Investor meetings have begun, with some cornerstone investors reportedly pushing for a valuation closer to $30 billion or $32 billion. The target and timeline are subject to change based on investor feedback.
Shein's draft IPO prospectus revealed a $99 million quarterly loss, attributed to slowing sales following the U.S. removal of an import duty exemption on small packages, and a $328 million fair-value charge due to an accounting change. Analysts suggest the valuation cut is primarily due to declining profits and the company's reliance on small-parcel tariffs, which are subject to changing trade rules in the U.S. and Europe.
If achieved, the $30 billion to $40 billion valuation would place Shein's market worth broadly alongside H&M, but significantly below Fast Retailing and Zara's parent company, Inditex. The planned price-to-sales multiples are considered conservative compared to peers, reflecting Shein's lower profit margins and earnings visibility.
Shein received approval from the China Securities Regulatory Commission for its Hong Kong IPO on July 10, clearing a path after previous listing attempts in New York and London. The company intends to use IPO proceeds for technology investments, global brand-building, corporate responsibility initiatives, and general corporate purposes.