Shein intends to issue an IPO in Hong Kong as early as mid-August with a $30 billion to $40 billion valuation, according to a report.
The timing and the target, which have not been previously disclosed, are not final and could change based on input from investor meetings that started last week, according to a report by Reuters.
The valuation represents a significant reset for Shein, whose private fundraising rounds were valued at $98.2 billion in 2022 but dropped to $64 billion in 2023 and April 2024 as growth slowed and outside pressures increased.
ALSO READ: IPO-Bound Shein Under Federal Trade Commission Lens; Says Cannot 'Predict Outcome'
Shein, which is well-known for selling $5 gowns and $10 jeans to customers in around 160 countries, is putting more emphasis on a price that can sustain the shares after the listing than on maximising valuation. Shein has spoken with investors in New York, Boston, and San Francisco over the past week, and some prospective cornerstone IPO investors are advocating for a valuation closer to $30 billion or $32 billion, Reuters reported.
The size, offer price, and schedule for Shein's anticipated stock market debut have not been made public.
According to Shein's draft IPO prospectus from last month, the company experienced a $99 million quarterly loss as a result of decreasing sales following the US removal of an import duty exemption on tiny packages and a $328 million fair-value charge on convertible redeemable preferred shares due to an accounting change.
ALSO READ: Shein Posts $99 Million Quarterly Loss Ahead Of Hong Kong IPO
Shein's business is under increasing pressure, as evidenced by slowing revenue growth and weaker core earnings. Shrinking margins have also sparked worries that the company's rapid expansion is being hampered by increased trade costs, stricter regulations, and heightened competition in international e-commerce.
If Shein is valued between $30 and $40 billion, it will be significantly less than Fast Retailing, which is valued at $161 billion, and Inditex, the parent company of Zara, which is valued at $208 billion. Shein would be roughly equal to H&M, which is valued at $26 billion.
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