Shein's IPO date approaches, and the company's valuation has already shrunk by about 78%

The Chinese fast-fashion giant Shein is approaching its planned IPO on the Hong Kong Stock Exchange, which could take place as early as next month. New estimates published by analysts at Bloomberg Intelligence (BI) value the company at $22-25 billion, while according to Reuters, Shein is aiming for a valuation of $30-40 billion.

The BI estimate reflects a valuation 13-15 times higher than the company's expected profit in 2027. This year was chosen because it is considered a more reliable benchmark, given that rising shipping costs and tariffs imposed by the United States will weigh on balance sheets this year. According to an estimate by BI analysts Catherine Lim and Jason Zhu, net profit will reach $1.67 billion next year and continue to climb by about 20% annually until 2029.

The valuation published by BI is less than half of the $66 billion figure set in a 2023 funding round. At its peak in 2022, the company was valued at approximately $100 billion, but slowing growth and increasing regulatory pressures have led to a decline in valuations.

Last month, Shein published a draft prospectus ahead of the IPO, according to which its revenue totaled $41.8 billion in 2025 compared to $38.7 billion in 2024. However, net profit plummeted by 38.7% to $2.06 billion. Its performance continued to weaken in 2026, when it recorded a net loss of $99 million in the first quarter compared to a net profit of $395 million in the same period last year. Shein claimed that profitability was hit by the cancellation of the customs duty exemption on imports of low-value shipments to the United States.

Shein has been planning an IPO for several years, but previous attempts to conduct it in New York and London failed due to pressure from regulators. The company was forced to cancel its plans for an IPO in the United States following criticism regarding environmental pollution and the use of forced labor.

Meanwhile, Shein is significantly reducing its operations in Vietnam, after having expanded production there following the return of Donald Trump to the White House in 2024 and expectations of a renewed trade war. The return of production to China is also taking place due to the difficulty in recruiting workers in Vietnam who would agree to the long hours and low wages common in Chinese factories. Shein's supplier network produces millions of models in small quantities, with orders shipped within days.

"Diversifying supply sources beyond China has practical limitations, especially for companies like Shein, whose competitive advantage depends on speed, flexibility, and ultra-small production runs," explained Sheng Lu of the University of Delaware.

A factory manager who returned from Vietnam to China summarized the matter: "They realized that although the US tariff on goods from Vietnam is lower than that imposed on goods from China, the lower efficiency makes production there less profitable compared to China."