Shein IPO in Hong Kong faces valuation test after delayed listing push

Shein’s IPO in Hong Kong is moving ahead with Beijing’s approval, but the fast-fashion group is seeking public-market capital after growth slowed and regulatory costs rose in key markets. A company filing showed 2025 revenue increased 8% to $41.8 billion, down from 20.7% growth the prior year, while Shein posted a $99 million loss in the first quarter of 2026.

The China Securities Regulatory Commission approved the listing earlier this month, CNBC reported, after Shein’s earlier attempts to list in New York and London did not proceed. Analysts told CNBC the delay has weakened investor enthusiasm for a company once valued near $100 billion in private markets.

William Ma, chief investment officer at GROW Investment Group, told CNBC that Shein had missed the most favorable window to list. Shaun Rein, managing director at China Market Research Group, said both investors and shoppers are less excited about the company than they were during its rapid expansion.

Why is Shein’s IPO valuation under pressure?

Bloomberg reported that Shein is under pressure to reduce its valuation target to about $30 billion, compared with nearly $100 billion in a 2022 fundraising round and $64 billion in 2024. Ma told CNBC that even a lower valuation would still look demanding, equal to roughly 19 to 25 times fiscal 2025 earnings, versus 9 times for PDD and about 11 times for established consumer companies in Hong Kong.

Lenny Zephirin, principal and analyst at The Zephirin Group, told CNBC that investors are now more likely to value Shein as a mature global apparel retailer than as a high-growth technology-enabled supply-chain company. He said its post-listing market value could settle in the high-$20 billion to low-$30 billion range.

Shein was founded in Nanjing by Sky Xu in 2008 and built its business on cheap, rapidly refreshed clothing sold online. The company later moved its headquarters to Singapore in 2022 while continuing to rely on a China-based supplier network, a structure that left it subject to Chinese regulatory review even as it pursued Western listings.

The company’s model depends on testing large numbers of designs, producing in small batches and shipping items when demand appears. That approach helped Shein limit unsold inventory, but it also made the business sensitive to changes in low-value parcel rules because many orders are sent directly from China to consumers abroad.

In the United States, the removal of an import-duty exemption for small packages from China increased cost pressure on that direct-shipping system. The exemption had allowed qualifying parcels under $800 to enter duty-free. Separately, Shein disclosed that its U.S. business is being investigated by the Federal Trade Commission for unspecified reasons and that the probe could lead to significant fines.

Consumer Edge analyst Michael Gunther told CNBC that Shein’s U.S. share of apparel, accessories and footwear spending peaked at around 5% in the first quarter of 2025, turned negative year over year by the fourth quarter and continued to lose ground in 2026. In the U.K., he said Shein’s share reached a record 7.5%, but annual share gains have slowed to roughly zero from about 1.8 percentage points in the first half of 2025.

Gunther also said Shein’s U.S. customer mix is shifting, with the steepest share losses among shoppers aged 18 to 34 and gains coming from consumers over 55. He told CNBC that losing momentum among younger shoppers while gaining older customers is a signal investors should monitor across markets.

Competition is also changing. Juozas Kaziukenas, an e-commerce industry analyst, told CNBC that Temu has moved toward local sellers with bulk-imported inventory, while Shein may find that harder because its fast-fashion system relies on launching many designs and shipping on demand from China.

Europe has added another cost challenge. After the European Union imposed a 3 euro fee on low-value imports this month, Kaziukenas said both Shein and Temu paused most advertising spending in Europe, a region that supplied about a third of Shein’s revenue last year.

Rein told CNBC that Beijing wants Chinese brands to list closer to home, in mainland China or Hong Kong. Shein’s Hong Kong listing therefore gives the company a path to market, but analysts cited by CNBC said it does so after the investor mood, regulatory environment and competitive setting have all shifted.

This story draws on original reporting from CNBC.