Shein shares slip more than 3% on second day of Hong Kong trading

Shein's shares experienced a significant decline of over 3% on September 2nd, following a disappointing debut on the Hong Kong Stock Exchange. The e-commerce giant's stock sank as much as 10% on September 1st but later recovered to near its offering price of HK$48.56. By early trade on September 2nd, the stock was trading at HK$46.94. The Hang Seng Index in Hong Kong also saw a modest drop of around 0.9%.

The decline in Shein's share price can be attributed to several factors cited by investors and analysts. These include higher import duties in key markets, growing regulatory risks, and increased competition from rival companies. Brandon Ho, head of investment advisory for Singapore at Arta Finance, noted that Shein's weak performance is a reflection of investors reassessing a growth story that has become more challenging to sustain.

Shein raised US$1.7 billion during its initial public offering (IPO), valuing the company at US$26.5 billion. This valuation represented nearly a quarter of the company's peak valuation of nearly US$100 billion in 2022. The IPO was seen as a successful event, with Shein's share price rallying late on September 1st, in part due to stabilisation measures often applied to large listings to prevent sharp declines on the first day of trading.