70% of value wiped out: Shein heads to Hong Kong Stock Exchange at $27 billion valuation
The fashion giant is launching an IPO in Hong Kong at a valuation approximately 70% lower than its peak. The prospectus reveals a sharp slowdown in growth, a loss in the first quarter, rising costs, and a massive compensation for early investors.
Shein is finally going public. The online fashion giant launched its initial public offering in Hong Kong today, after years of attempts to trade on the public market. The Wall Street Journal reports this morning that the company is offering 280 million shares at a price of 47.60-49.50 Hong Kong dollars per share, a range that gives it a valuation of approximately 25.7-26.8 billion dollars. The stock is expected to begin trading on September 1.
But the number that catches the eye is 100 billion dollars - the valuation at which Shein was estimated at its peak, in a private funding round in 2022. In the current offering, the company is worth at most about 27 billion dollars, meaning about 70% less within four years.
And the prospectus explains why private investors are willing to accept the haircut. Shein reports that revenue in the US fell by 14.3% in the first quarter, from 2.4 billion dollars to 2 billion dollars, mainly due to the impact of tariffs. At the same time, the company went from a profit of 395 million dollars to a loss of 99 million dollars in the first quarter of 2026.
The expense structure also tells the story: shipping and fulfilment expenses jumped by 12.8% to 4.32 billion dollars, and marketing expenses jumped by 31.4% to 1.43 billion dollars. The ratio of shipping expenses to revenue rose from 42.8% to 47.7%.
But perhaps the most surprising figure in the prospectus is the compensation for early investors. Shein will allocate up to 3.5 billion dollars in cash and additional shares to certain investors, following the sharp decline in the company's value. This is an amount almost twice as large as the new capital the company itself is raising in the IPO.
In the offering itself, Shein is seeking to raise up to 13.86 billion Hong Kong dollars, about 1.77 billion dollars, and the money is intended, among other things, for technology, artificial intelligence, data analysis, marketing, and expanding global operations.
