Singapore-based fast fashion e-commerce SHEIN plans to price its Hong Kong IPO near the midpoint of the offering range, valuing at $26.5 billion
Singapore-based, China-origin fast fashion e-commerce SHEIN plans to price its Hong Kong IPO near the midpoint of the offering range, at approximately HK$48.56 per share, with a range of HK$47.60 to HK$49.50. According to insiders, this pricing will raise about HK$13.6 billion, equivalent to $1.73 billion, corresponding to a valuation of about $26.5 billion. The company has not responded to requests for comment.
About 280 million Class B shares will be issued, with approximately 10% allocated for public offering, stock code 00625, and plans to list on the Hong Kong Stock Exchange on September 1. The book has already been fully covered, with the subscription multiples for institutions and retail investors set to be announced the day before listing. Cornerstone investors have subscribed for about $383 million, including existing shareholders Boyu, Tiger Global, General Atlantic, as well as Tencent, Greenwoods, Taikang Life, and UBS Asset Management. Joint sponsors are Goldman Sachs, Morgan Stanley, and JPMorgan Chase.
The $26.5 billion valuation is about a quarter of the nearly $100 billion peak in private equity in 2022 and lower than the $66 billion raised in 2023. Initial discussions during the roadshow considered a valuation of $30 billion to $40 billion, ultimately settling in the range of $26 billion to $27 billion. Based on projected sales, the valuation is about 0.7 times, higher than Zalando's 0.4 times, but lower than H&M's approximately 1.1 times and Inditex's approximately 4.0 times. Analysts suggest that based on 2025 earnings, the corresponding price-to-earnings ratio is about 12 to 13 times, with an issuance ratio of about 6.59%, and a greenshoe option attached.
Business figures have slowed down. Net revenue for 2025 is projected to be about $41.85 billion, with a net profit of $2.06 billion, a year-on-year decline of 38.7%. In the first quarter of 2026, the company shifted from a profit of $395 million in the same period last year to a loss of $99 million, partly due to a $328 million accounting loss from special stock treatment. The U.S. cancellation of tax exemptions for small packages and rising tariffs have forced the company to raise prices in the U.S.; the conflict in Iran has also increased costs and slowed down deliveries in some markets. Products are still sold in about 160 countries, with dresses priced at around $5 and jeans at $10.
About 40% of the funds raised will be invested in technology and inventory systems, 40% in brand and overseas expansion, 10% in corporate responsibility, and the remainder for general operations. The China Securities Regulatory Commission approved overseas listings on July 10, after failing to list in New York and London for four years. Under the weighted voting rights structure, the founding team maintains control.
In terms of market mechanics, this is a liquidity event after a valuation reset. Buyers are original shareholders taking cornerstone shares and Hong Kong retail funds, while sellers are early private equity investors looking to cash out. Funds flow from the public market into the company's accounts, then to technology and marketing, rather than immediately expanding production. Beneficiaries are cornerstone investors locked in for six months and investment banks receiving underwriting fees; those under pressure are late private equity investors who entered at high valuations in 2022 to 2023 and have seen significant paper losses, as well as those relying on a growth model based on low-cost direct shipping from the U.S. Coverage of the order book does not equal listing premium, and pricing at the midpoint indicates sufficient demand but limited enthusiasm.
Source: Public information
ABAB AI Insight
SHEIN's four-year, three-location listing journey has faced challenges in New York due to supply chain and forced labor scrutiny, in London due to regulatory and valuation issues, ultimately returning to Hong Kong where it received approval from the regulatory commission. This is not a matter of location preference but the only viable option left. With headquarters in Singapore, factories in China, and customers in Europe and the U.S., this structure can only pass pricing power to Asian markets willing to accept weighted voting rights amid tightening tariffs and disclosure rules.
The capital path involves first halving the valuation, then having old shareholders act as cornerstones to support the issuance. A significant portion of the $383 million cornerstone investment comes from Boyu, Tiger, and GA's own funds, effectively using the same team to floor the new issuance. The nearly $100 billion valuation in 2022 was built on pandemic-driven online shopping and U.S. tax exemptions for small packages; the removal of tax exemptions led to a direct profit loss in the first quarter. The listing is not about realizing a growth premium but moving chips that cannot exit the private market to a tradable venue.
Comparative examples include Pinduoduo's regulatory discount after going public in the U.S. and SHEIN's benchmark against Zara's parent company Inditex: the latter uses stores and design cycles for high multiples, while the former relies on algorithms for new products and cross-border small packages for scale. The current phase is a "de-bubbling listing," not a second explosion. The fast fashion industry has moved from traffic arbitrage to internalizing costs related to tariffs, carbon, and intellectual property; those relying on $5 dresses to boost valuations must accept a 0.7 times sales pricing.
The structural judgment indicates a transfer of pricing power. Previously, pricing power resided with private equity hot money and U.S. tax exemption channels; now it lies with tariff rules and Hong Kong stock liquidity. The mechanism is: with the disappearance of tax exemptions for small packages, unit economics shift from "tax-free cross-border" to "tax-inclusive retail"; once growth slows, a $100 billion valuation cannot be justified without corresponding cash flow. The $26.5 billion offered by Hong Kong reflects a revaluation of the business model from regulatory arbitrage to that of a typical apparel e-commerce.
ABAB News · Law of Cognition
Once the tax exemption channel is closed, the valuation shifts from narrative back to clothing.
Not being able to list in New York does not mean Hong Kong will offer New York prices.
Old shareholders supporting the market indicates new money is pushing for lower prices rather than seeking to invest.