Shein shares plunge 10% in Hong Kong debut after US$1.7 billion IPO

Shein's shares plummeted about 10% during their Hong Kong debut following a US$1.7 billion IPO. The offering valued the company at over US$26 billion, which is significantly lower than its 2022 peak of nearly US$100 billion. The shares traded as low as HK$43.72, below the IPO price of HK$48.56. This valuation makes Shein one of the largest listed apparel and fashion companies globally, but still far below competitors like Hennes & Mauritz, which is valued at approximately US$30 billion.

The listing serves as a test for investor appetite in the internet retail industry, which has faced challenges such as inflation, trade disruptions, and consumer caution. Since its 2022 valuation peak, Shein has encountered various hurdles, including higher tariffs, increased regulatory scrutiny, and intensified competition from Chinese e-commerce giants like Temu and AliExpress.

Investment banks suggest that Shein's higher valuation multiple compared to peers like PDD and traditional market indices indicates limited appeal as a traditional e-commerce company that relies heavily on price competition. Analysts caution that the stock is already pricing in a partial growth recovery before the company has achieved any actual growth.

Investors will closely monitor upcoming lock-up periods and regulatory challenges in key markets to determine whether Shein's valuation holds up amid growing competitive and geopolitical pressures.