Shein Cuts Company Valuation to Around $25 Billion in Hong Kong IPO, Sources Say

Online fast-fashion retailer Shein is eyeing a company valuation of around $25 billion in its long-awaited Hong Kong initial public offering, according to people familiar with the matter. The figure marks a significant markdown from earlier targets and a dramatic decline from the nearly $100 billion valuation the company commanded in a 2022 fundraising round.Singapore-headquartered Shein, which was founded in China in 2012 and is known for selling low-priced clothing such as $5 dresses and $10 jeans to customers in about 160 countries, is aiming to launch the IPO later this week, sources have indicated.One of the sources said the company is looking at a valuation range of $25 billion to $28 billion based on the marketing price band for the offering. The sources declined to be named as they were not authorized to speak publicly ahead of an official announcement of deal terms. A Shein spokesperson did not immediately respond to requests for comment.Sharp Decline from Peak ValuationThe latest target represents a steep drop from the $30 billion to $40 billion valuation Shein was seeking earlier this month after beginning investor meetings. It is also far below previous private-market valuations: approximately $98.2 billion in 2022, later revised downward to around $64 billion in subsequent rounds.The reduction reflects challenging business conditions, including slower growth, higher trade costs, regulatory pressures in key markets, and intensifying competition. Some investors who reviewed recent financials or attended IPO presentations have expressed skepticism that Shein can return to the rapid growth rates that once supported its peak valuation.Financial Context and PressuresShein’s prospectus and related disclosures have shown softening performance. Revenue growth has slowed, and the company reported a net loss of about $99 million in the first quarter of 2026, compared with a profit in the same period a year earlier. Full-year 2025 figures indicated revenue above $40 billion but with declining profitability compared with prior peaks.Key headwinds include the loss of favorable low-value shipment exemptions in the United States, new fees on e-commerce parcels in Europe, higher freight and tariff costs, and increased scrutiny of fast-fashion supply chains. These factors have weighed on margins and near-term growth expectations.A lower IPO valuation could also trigger contractual obligations. Under the terms of its IPO filing, Shein may need to provide additional shares to certain pre-IPO investors if the valuation falls below agreed thresholds.Path to the Hong Kong ListingShein’s IPO journey has been prolonged. After confidential filings and failed attempts to list in New York and London amid regulatory and political scrutiny, the company received approval from Chinese regulators for a Hong Kong listing. The Hong Kong Stock Exchange process has advanced, with pre-marketing underway and a formal launch targeted for the near term.The company has indicated it could sell up to about 8% of its shares, potentially raising low- to mid-single-digit billions of dollars depending on final pricing and demand. Existing shareholders may participate significantly in the offering.At a $25–28 billion valuation, Shein would rank in a range comparable to some traditional fast-fashion peers such as H&M, though well below larger apparel groups like Inditex (Zara) or Fast Retailing (Uniqlo).Market OutlookInvestors are weighing Shein’s still-substantial scale, large active customer base, and historical growth against current profitability pressures and geopolitical trade risks. Analysts have offered valuations in similar or slightly lower ranges, citing normalized earnings expectations after tariff and freight impacts.The final price will depend on investor feedback during the marketing process. Soft demand could lead to further adjustments in size, pricing, or timing.