Shein, the Singapore-headquartered, China-founded fast-fashion retailer, made its long-anticipated trading debut on the Hong Kong stock exchange on Tuesday. The company raised $1.7 billion in the initial public offering, pricing shares at HK$48.56. This flotation follows previous failed attempts to list in New York and London, which were derailed by regulatory scrutiny.
The market debut was tepid, as shares slumped as much as 10% in early trading, falling to as low as HK$43.72 before recovering to end the day flat. This reflects a significant decline in the company's valuation, which now stands at just over $26 billion. This figure is slightly above a quarter of Shein's 2022 peak valuation of nearly $100 billion.
The company's growth prospects are being hampered by several factors, including regulatory headwinds, slowing sales, and shrinking market share. Investors are weighing scrutiny over Shein's environmental footprint and alleged human rights violations, as well as competition from other e-commerce companies. Additionally, profit margins are being squeezed by US tariffs, rising shipping costs, and French and EU duties on fast-fashion items.