Online fast-fashion retailer Shein is set to raise about $1.7 billion from its Hong Kong initial public offering (IPO), valuing the company at approximately $26.5 billion, according to people familiar with the matter.
The company is expected to price the IPO at HK$48.56 per share, near the midpoint of its marketed range of HK$47.60 to HK$49.50, the sources said.
The pricing would allow Shein to raise about HK$13.6 billion ($1.73 billion) from the offering.
The sources spoke on condition of anonymity because the information has not been made public. Shein did not immediately respond to a request for comment.
The valuation places Shein at about one-quarter of its nearly $100 billion private-market peak in 2022 and significantly below the $66 billion valuation it secured in a 2023 fundraising round.
Shein, which is headquartered in Singapore and was founded in China, launched its Hong Kong IPO on Monday after unsuccessful attempts over the past four years to list in New York and London.
The overall IPO order book was fully covered by Tuesday, although retail investor demand has reportedly been less robust.
Alvin Cheung, associate director at Hong Kong securities firm Prudential Brokerage, said investor enthusiasm for new listings had weakened following an Asian market correction in July.
He added that Shein’s growth prospects were also being questioned amid rising costs and intensifying online competition.
“‘Shein didn’t list in Hong Kong when it was in its prime, why should we take them now (that growth is slipping)?’” Cheung said, describing the sentiment among some investors.
Shein’s subscription rates among institutional and retail investors are expected to be published on Monday, a day before the company’s shares begin trading on the Hong Kong Stock Exchange.
The IPO marks a major milestone for the fast-fashion retailer, which is known for selling low-priced clothing in about 160 countries, including dresses for around $5 and jeans for about $10.
However, the company has faced regulatory scrutiny and growing business pressures in its key US and European markets.
Cornerstone investors led by existing shareholders Boyu Capital, Tiger Global and General Atlantic have subscribed for about $383 million worth of shares, according to Shein’s prospectus.
Other investors participating in the offering include Tencent, Greenwoods, Taikang Life and UBS Asset Management.
Shein plans to use about 80% of the IPO proceeds to strengthen its technology infrastructure and expand its brand and global reach.
The company has also agreed to pay up to about $3.5 billion in cash to certain investors who purchased special shares during earlier private funding rounds.
The listing comes as Shein contends with slowing revenue growth, weaker earnings and narrowing profit margins, alongside higher trade costs, tighter regulation and intensifying competition.
The company expects first-half revenue growth to broadly match the 1.1% recorded in the first quarter, while its operating margin is projected to decline slightly.
Boluwatife Enome
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