The Shein IPO raised US$1.74 billion (RM7.1 billion), but the valuation has shrunk sharply. Maybank Securities put the fast-fashion retailer’s 2022 peak at US$98 billion. This is a Hong Kong listing, so Shein does not trade on Bursa Malaysia.
What Did the Shein IPO Raise, and at What Valuation?
Shein priced its shares at HK$48.56, raising US$1.74 billion (RM7.1 billion) and valuing the company at about US$26.5 billion. Pre-marketing had pencilled in US$40 billion to US$50 billion.
By late August, the top of the range had come down to about US$26 billion to US$28 billion. Maybank Securities’ Ben Ho said: “That is what the market would actually pay.”
Since the stock started trading on Sept 1, it has yet to trade above the IPO price. Bank of America (BOA) analysts initiated coverage on Oct 8 with an “underperform” call and a HK$29 target price. That target sits below the Oct 15 closing price of HK$36.50.
Why Did Shein List in Hong Kong After Two False Starts?
Shein moved its headquarters to Singapore in late 2021, with Singapore-registered Roadget Business running its global website, according to a Feb 17, 2022, Forbes report. The company first filed confidentially for a US listing in 2023, then shifted to London in 2024.
China’s securities regulator approved the Hong Kong filings on July 10. Saxo’s Ruben Dalfovo says Shein’s southern China suppliers give it “thousands of suppliers, very short production runs”.
In February, Xu Yangtian said Shein is investing more than RMB10 billion (RM6.1 billion) in a smart supply chain system. The figure came from a China Daily report on Feb 26.
How Thin Are Shein’s Margins Behind the Listing?
- FY2025 revenue: up 8% to US$41.8 billion, down from 21% growth a year earlier
- FY2025 net profit: down 39% to US$2.1 billion
- 1QFY2026 revenue: up just 1.1%
- 1QFY2026 net loss: US$99 million, including a US$328 million non-cash charge on convertible redeemable preferred shares
- Operating margin: about 3%, per Maybank
Fulfilment costs rose from 42% of revenue in FY2023 to about 48% in 1QFY2026. Marketing climbed from 11% to 16% over the same period.
On Sept 28, Shein reported a 53% plunge in operating income for 1HFY2026 ended June. The company blamed higher freight costs as the Middle East conflict pushed up oil prices.
Shares fell as much as 14% the next day before closing 11% lower, the steepest one-day drop since listing. Shein held more than US$14 billion in cash and short-term investments as at March 31, so funding was not the trigger.
What Tariff and EU Duty Risks Hit Shein’s Revenue?
The US scrapped its de minimis exemption for low-value parcels from China on May 2, 2025. China-made goods now face tax rates of 10% to 87.5%, up from 0% to 62.5%.
Shein’s US revenue fell 14% year on year in 1QFY2026. The US share of revenue dropped to about 23%, down from 29% in FY2023.
Europe made up 35% of FY2025 revenue, against 24% for the US. On July 1, the EU replaced duty-free entry for parcels worth up to €150 (RM687) with a flat €3 duty on each category of item.
France’s per-item levy, from €0.50 up to €12 an item, started on Sept 1. Shein’s average order of about US$39 means flat fees bite hardest. Ho says there is “just no spare capacity to absorb another round of duties.”
Is Shein Cheaper Than PDD Holdings on Earnings?
At the IPO price, Shein traded at more than 15 times forward earnings. PDD Holdings, owner of rival Temu, traded at about 7.4 times, according to Saxo’s Charu Chanana.
After its first week of trading, Shein was worth closer to US$21 billion. Chanana said: “US$21 billion is much easier to defend than US$27 billion, but I wouldn’t call it obviously cheap.”
Jefferies initiated coverage on Sept 14 with an “underperform” call and a HK$26 target price. That target sits about 16% below the company’s closing price on Sept 30.
Ho says the real test is whether Shein can become a marketplace, where outside brands sell through its app and Shein keeps a 10% to 20% commission. He adds that fast fashion as a category is still investable, pointing to Inditex.
What Do Shoppers and Labour Records Show for Shein?
Undergraduate Min orders from online platforms two or three times a month, typically spending S$30 (RM95) to S$60 each time. She cites “inconsistent quality in products” as her main complaint about Shein.
Of the dozen online shoppers The Edge Singapore spoke to, half said they had changed their buying habits, mostly by buying less. In 2022, Bloomberg News lab tests found cotton in two batches of Shein garments matched cotton from Xinjiang.
Shein’s greenhouse gas emissions rose 23% to 26.2 million tonnes in 2024, according to its sustainability report.
Key Takeaways
- The Shein IPO raised US$1.74 billion (RM7.1 billion) at HK$48.56 a share, valuing the company at about US$26.5 billion.
- Net profit fell 39% to US$2.1 billion in FY2025, and the operating margin was about 3% in 1QFY2026.
- US and EU duty changes are the main revenue pressure, with the US share of revenue down to about 23%.
- At the IPO price, Shein traded at more than 15 times forward earnings, against about 7.4 times for PDD Holdings.
This article is for general information only and is not financial advice. Do your own research before making any investment decision. Malaysian readers tracking local listings can read IPO Investing with M+ Global.
Frequently Asked Questions
What price did the Shein IPO shares sell at?
Shein priced its Hong Kong IPO shares at HK$48.56. The offering raised US$1.74 billion (RM7.1 billion) and valued the company at about US$26.5 billion.
How much did Shein raise in its Hong Kong IPO?
Shein raised US$1.74 billion (RM7.1 billion) in its Hong Kong IPO. Maybank Securities put the company’s 2022 peak valuation at US$98 billion for comparison.
Has Shein stock traded above its IPO price?
No, Shein has yet to trade above its IPO price since it began trading on Sept 1. Bank of America analysts set a HK$29 target price, below the Oct 15 closing price of HK$36.50.
Why did Shein list in Hong Kong instead of the US?
Shein first filed confidentially for a US listing in 2023, then shifted to London in 2024. It turned to Hong Kong after the London route stalled amid regulatory scrutiny and the need for Chinese approval.
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