Shein substantially lowers valuation ahead of one of the year's most anticipated IPOs

Online retailer Shein plans to begin trading its shares on the Hong Kong Stock Exchange on September 1. In the initial public offering, the company expects to raise up to HK$13.86 billion, or about $1.77 billion, at a valuation of nearly $27 billion.

The company will offer investors about 280 million shares at a price range of HK$47.60 to HK$49.50 each. The final offer price is planned to be announced on August 31, and trading is to start the following day.

If the shares are sold at the top of the price range, Shein's market value will be about $27 billion.

This is about 70% lower than the company's peak valuation. In 2022, during a private funding round, Shein was valued at almost $100 billion. In 2023, the valuation dropped to about $64 billion.

The decline in the company's value comes amid slowing growth rates, rising costs, and more cautious investor attitudes toward Shein's business model. Before starting preparations for the current IPO, the company was targeting a valuation of $30-40 billion, but ultimately had to lower the target level.

The listing on the Hong Kong exchange is the result of Shein's multi-year attempts to go public. The company previously considered share offerings in New York and London, but those plans faced regulatory hurdles and increased attention to its supply chains and business practices.

Shein was founded in China, but its headquarters is now in Singapore. The company sells inexpensive clothing and other goods in about 160 countries and is considered one of the largest global players in the fast fashion segment.

Shein plans to use the IPO proceeds, in particular, to develop technology and further international expansion.

Sources: The Guardian, RTHK