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Fast fashion retailer Shein priced its shares at HK$48.56 in the middle of its range, raising HK$13.6 billion and valuing the company at just over $26 billion on its long-awaited stock market debut in Hong Kong, contrasting with soaring IPOs from technology firms in Asia.
Shein experienced a turbulent trading debut on the Hong Kong Stock Exchange on Tuesday, with shares briefly plunging as much as 10 percent in the opening minutes before recovering to close nearly flat at 48.50 Hong Kong dollars, equivalent to roughly 5.33 euros.
The fast fashion retailer had priced its shares at HK$48.56, placing them in the middle of its marketed range, raising HK$13.6 billion and giving the company a valuation of just over 26 billion US dollars. Market analysts suggested that Goldman Sachs, acting as the stabilisation manager for the initial public offering, likely intervened to purchase stock before the close of trading in order to prop up the price.
The subdued reception stood in sharp contrast to other recent public listings across Asia, where memory chip manufacturer CXMT and humanoid robotics firm Unitree both surged by more than 400 percent on their respective trading debuts, reflecting strong investor appetite for technology focused companies over consumer facing retailers. The lukewarm market response highlights a significant decline in Shein valuation from its peak during the pandemic era.
Lockdowns and the viral spread of Shein haul content on social media attracted a wave of young consumers to its affordable clothing, pushing its valuation to approximately 100 billion US dollars following a private fundraising round in 2022. Enthusiasm among investors began to fade later that same year, however, with a subsequent funding round placing the company at 66 billion US dollars.
Shein had earlier pursued listings in both New York and London, but those efforts were thwarted by opposition from politicians and regulators concerned about the transparency and labour practices of its Chinese supply chain. In July, Chinese regulators gave their approval for the company to pursue a listing in Hong Kong.
With its current market capitalisation, Shein now ranks among the largest listed fashion groups globally, with a valuation roughly comparable to Swedish competitor H&M, although both lag Inditex, the owner of Zara, which carries a market capitalisation of around 213 billion US dollars. Financial performance has been under pressure in recent periods, adding to investor caution.
Net profit declined to 2 billion US dollars last year after reaching a peak of 3.4 billion US dollars in 2024, while net profit margins compressed sharply from 8.7 percent to 4.9 percent over the same span. The company also reported a net loss of 99 million US dollars in the first quarter, during which management flagged the risks posed by ongoing trade tensions between the United States and the European Union.
In May of the previous year, Washington eliminated a tariff exemption for small packages that Shein had relied upon to ship clothing directly to American consumers, and the EU has since moved to close a comparable loophole. Kenny Ng, a strategist at Everbright Securities International, noted that the market is currently adopting a wait and see posture, weighing the uncertain international trade policy environment alongside the gradual recovery of global consumer sentiment.
William Bratton, head of cash equity research for Asia Pacific at BNP Paribas, added that consumer sector offerings simply do not appear as compelling as technology at the present moment
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