Shein eyes company valuation of around US$25bil in Hong Kong IPO

HONG KONG - Online fast-fashion retailer Shein is targeting a company valuation of around US$25 billion for its upcoming Hong Kong IPO, according to three sources familiar with the matter. This marks a significant decline from the company's valuation of nearly US$100 billion four years ago, attributed to difficult business conditions.

Shein, headquartered in Singapore, offers affordable clothing to customers in over 160 countries, selling items ranging from US$5 dresses to US$10 jeans. The company, founded in China in 2012, is expected to launch its initial public offering later in the week, as reported by Reuters. Sources indicate the company is aiming for a valuation between US$25 billion and US$28 billion, based on the price band set for the offering.

The sources did not allow for identification as they were not authorized to speak to the media ahead of an official announcement of the deal terms. Shein's spokesperson did not immediately comment on the matter when contacted by Reuters. The latest valuation target is lower than the initially set range of US$30 billion to US$40 billion, announced at the beginning of the month and soon after Shein began meeting with potential investors, as reported by Reuters on August 4.

Some investors who attended investor presentations or reviewed recent financial statements expressed concerns about Shein's ability to return to the growth rates that had previously justified its valuation of US$98.20 billion during a 2022 fundraising round. A lower valuation could potentially impact Shein's financials, as per the terms of its IPO filing, the company would be obligated to issue additional shares to certain pre-IPO investors if the valuation falls below predetermined thresholds.