Fast fashion giant Shein launches up to US$1.8bil Hong Kong IPO

Online fast-fashion retailer Shein has launched a Hong Kong initial public offering (IPO) to raise up to US$1.8 billion, according to an offering prospectus. The company aims to value itself at up to US$26.81 billion in the IPO, which will involve the sale of 280 million shares. Shares will be priced between HK$47.60 and HK$49.50 per share, with the pricing taking place on August 31 and the debut scheduled for September 1.

Shein's decision to go public comes as the company faces challenges such as slowing revenue growth, weaker core earnings, and concerns about its breakneck expansion. These issues stem from higher trade costs, stricter regulatory scrutiny, and increased competition in the global e-commerce market. The IPO reflects Shein's ambition to further expand its global reach, which currently includes about 160 countries.

The company recently reported a US$99 million quarterly loss after the US scrapped a duty exemption on small packages, which had been a cost advantage in its low-cost business model. Additionally, Shein incurred a US$328 million fair-value charge related to convertible redeemable preferred shares due to an accounting change.