Shein Finally Makes Its Hong Kong IPO Debut But Fails to Impress

Shein's journey to going public hit the finish line this week, but was not what many had expected. Shares of the fast-fashion giant began trading on the Hong Kong Stock Exchange on Tuesday, and the debut session was below expectations.

Shein’s volatile debut turns heads

The stock dropped as much as 10% during the morning session on Tuesday, falling to a low of HK$43.72. The shares later recovered in the closing hours of the market. It then closed at HK$48.50, which is about 0.12% below its set HK$48.56 offer price.

The offering raised HK$13.6 billion ($1.74 billion) after the company sold about 280 million shares at the offer price. Hong Kong investors got about 10% of the allocation, with the rest of the 90% going to international buyers.

The listing valued the company at around $26.5 billion, which is a 7% drop from the almost $100 billion private valuation it had in 2022. 

Bryan Gildenberg, managing director of Retail Cities, pointed to the changing competitive space as a long-term worry. "If I were Shein, that would probably be my biggest concern," he told CNBC.

Losses widen as costs and competition pile up

The disappointing Shein IPO debut comes after a bad run of financial results. In the first quarter of this year, the fast-fashion retailer recorded a net loss of $99 million, which is a reversal from a $395 million profit in the same period a year earlier. 

The company highlighted the fair-value losses linked to its convertible redeemable preferred shares as the cause of the loss. Its 2025 revenue did grow to $41.8 billion from $38.7 billion the year before, though growth has slowed.

The losses can also be dated back to the changes in trade policy. The removal of the "de minimis" exemption in the US, which was used to ship small parcels tariff-free, affected a part of the low-cost shipping model that boosted its growth. 

Furthermore, there are more competitors eating into the fashion company’s customer base. Rivals like Temu ans TikTok Shop have targeted its budget-conscious shoppers. 

Gildenberg noted that the company's advantage in "gamified discount hunting" is fading. "Shein and Temu were getting caught up a little bit, particularly by TikTok," he said.

Years of delay before hitting the Hong Kong market

The Hong Kong listing ended a long and difficult road to the public markets. The firm first tried to go public in New York before trying the London market. Both attempts failed, mainly because Chinese regulators withheld approval due to concerns about supply chain risk disclosures.

However, despite the lackluster start, the business is still large. Active customers grew to 281 million as of March, up more than 16% year over year. The company also saw over one billion orders placed in the past twelve months. 

Meanwhile, Chief Financial Officer Leigh Gui was optimistic at the listing ceremony, saying the company wanted to "let global consumers enjoy the sound of fashion." 

On future plans, the company said it would use 40% of the IPO proceeds to improve its technology infrastructure. They added that another 40% would go to brand awareness and expansion globally, with the rest going to general purposes.