Shein shares slide as much as 10% in long-awaited Hong Kong trading debut

HONG KONG – Online fashion retailer Shein’s shares tumbled about 10 per cent in early Hong Kong trading on Sept 1 as the company made its long-awaited debut, capping a years-long effort to go public.

The stock began trading at HK$48.56 each, in line with the final price set in the initial public offering that raised US$1.7 billion (S$2.16 billion) and valued Shein at US$26.5 billion.

The shares then fell to HK$43.80 each.

At about 10.30am, an hour after trading began, the shares were at HK$44.74, down nearly 8 per cent.

On its debut, the company is valued well below its 2022 peak of nearly US$100 billion.

Demand for its stock during the IPO was tepid compared with other high-profile deals in the past year.

The retail tranche was subscribed 5.63 times, while the international portion was subscribed 2.59 ​times, Shein said in a stock exchange filing on Aug 31.

Some deals have been hundreds of times oversubscribed, especially from Hong Kong’s army of retail investors who track IPOs very closely.

“Never been bullish on this IPO. Revenue’s not growing, and a lot of the money raised is basically going back to the earlier investors,” said Dickie Wong, executive director of research at uSMART Securities in Hong Kong.

“Grey market already dropped below the offering price, cornerstone lock-up doesn’t really help.”

The amount sold in the IPO represents about 6.6 per cent of Shein’s enlarged share capital.

Cornerstone investors took about one-fifth of the IPO and are locked up for six months, leaving roughly 5 per cent freely tradeable.

Known globally for selling US$5 tops and US$10 dresses, Shein has been humbled by tariff and duty changes in the US and Europe that undermine the foundations of its business.

Intense scrutiny of its business practices in the West also hampered its attempts to list in New York and London, which were ultimately blocked by the Chinese authorities.

“The valuation reset reflects more than just slower growth,” said Li Jianggan, chief executive of consultancy Momentum Works, adding that investors now regard Shein as exposed to tariffs, other regulatory risks and competition.

First-quarter loss, new strategies

In 2025, the US ended the de minimis duty exemption for e-commerce shipments under US$800 that had powered Shein’s direct-shipping model.

The European Union recently followed suit, imposing fees on low-value packages.

Shein’s net income slid 39 per cent in 2025, and it swung to a loss in the first quarter.

It has said it expects first-half operating profit margin to be slightly lower than in the first quarter, hurt by higher customs duties, tariffs, fees and logistics costs in Europe and the Middle East.

“New markets could help offset slower growth in the US and Europe, but lower spending power in developing markets may limit the benefit if delivery costs stay high,” said Lorraine Tan, director of equity research at Morningstar.

Shein has been trying to widen beyond its own-label ultra-cheap fast fashion, having expanded its third-party marketplace and bought US apparel brand Everlane in May.

In its prospectus, it said it aims to offer marketplace and supply chain services to more brands, in the footsteps of French brand Pimkie and British brand Missguided, which it bought in 2023.

The IPO has helped Shein compensate early investors who invested at much higher valuations.

The company has agreed to make cash payments totalling about US$3.5 billion and share adjustments to some preferred shareholders.

“This IPO is not just a fund-raising event – it is also, and probably more of, a capital structure event,” Momentum Works’ Li said. REUTERS