Key points:

• Shein IPO is a miss
• Shares slide 10%
• Company raises $1.7B

Fast fashion finally reached the public market. Investors immediately returned part of the order.

👗 Hong Kong debut loses its sparkle

• Shein shares 625 fell as much as 10% during their first Hong Kong session, dropping from the HK$48.56 offer price to around HK$43.80.
• The decline pushed Shein’s market value below $25 billion before the company had finished celebrating its long-delayed arrival.
• The initial public offering raised approximately HK$13.6 billion, or $1.7 billion, making it one of Hong Kong’s largest listings this year.
• An IPO is when a privately owned company first sells shares publicly — usually with management hoping the opening chart points in the other direction.
• Demand looked respectable before trading: the institutional allocation was 2.6 times oversubscribed and retail investors requested 5.6 times the shares available.
• Yet the debut still disappointed, suggesting buyers liked the initial opportunity considerably more than they liked holding it at the advertised price.

💸 A $100 billion valuation unravels

• Shein entered the market valued at $26.5 billion, down nearly three-quarters from its roughly $100 billion private valuation in 2022. That earlier figure reflected pandemic-era online-shopping growth.
• Today’s price reflects tariffs, regulation, slower sales and fewer investors willing to pay startup multiples for a mature retailer.
• The company swung to a $99 million first-quarter loss from a $395 million profit a year earlier. US revenue fell 14.3%, while annual profit reportedly declined from $3.4 billion in 2024 to $2 billion in 2025.
• Analysts also questioned why Shein trades at a premium to PDD, the owner of rival Temu, despite facing slower growth and greater regulatory risk.
• Investors currently appear more interested in Chinese AI, robotics and memory-chip listings. Fast fashion has discovered that market trends change even faster than wardrobes.

📦 Tariffs attack the business model

• Shein’s advantage came partly from shipping low-value parcels directly from Chinese factories to consumers without import duties.
• The US removal of its “de minimis” exemption ended that benefit. Applicable tariffs on some Chinese-origin products now range from 10% to 87.5%, forcing Shein to absorb costs or raise prices.
• Europe is tightening similar rules, while higher shipping costs and disruption around the Strait of Hormuz add another margin headache. Competition from Temu, AliExpress, H&M and Zara remains intense.
• Shein plans to use IPO proceeds for technology, marketing and international expansion while growing its third-party marketplace and acquired brands.
• Traders should watch whether the shares reclaim HK$48.56. Until then, the first public verdict is fairly clear: a discounted valuation can still receive another markdown.

Source: Tradingview