Shein IPO valuation sinks to $17 billion after Hong Kong listing

A long-delayed listing, at a steep discount

Shein is now a public company, but going public cost it most of its valuation, and the losses continued after the first day of trading. The ultra-fast-fashion retailer started trading on the Hong Kong Stock Exchange on September 1, 2026, under the ticker 0625, after setting its offer price at HK$48.56 per share.3 It sold about 280 million Class B shares and raised roughly HK$13.6 billion, or about US$1.74 billion. At that price the company was worth about $26.5 billion.5 Shein ended up near the middle of its HK$47.60–49.50 marketing range.5

The question going in was whether public investors would value Shein like a tech platform or like a fast-fashion retailer. Within a month, they had cut the price even further than the deal itself did.

How the valuation fell, step by step

All the coverage starts from the same comparison, though the numbers differ slightly. Shein raised money at a valuation of about $98.2 billion in a 2022 private round, according to Reuters. Its 2023 round valued it at $64 billion, and an April 2024 round held that level.20 Some reports put the later round at $66 billion instead.618 Measured against the 2022 peak, the IPO price is about 73% lower.5 One outlet described the drop as "57%," but it used the $64 billion figure as the peak, so its number understates the fall from the true high.2

The target also kept shrinking in the months before the deal. In July, after China's securities regulator approved the listing on July 10, Shein was reported to be aiming for $40 billion to $50 billion.716 When bankers started meeting investors in August, they were asking for $30 billion to $40 billion.20 The deal launched on August 24 at just under $27 billion, even at the top of the range.1220 Just before launch, Bloomberg Intelligence estimated that Shein's niche justified only $22 billion to $25 billion. That estimate assumed about 13 to 15 times projected 2027 earnings, with profit recovering to $1.67 billion that year.13 Looking back, that cautious estimate was closer to where the shares actually traded than anything the company's bankers proposed.

Reuters reported that Shein chose to protect the stock's performance after listing rather than squeeze out the highest possible price.5 The strategy failed.

Debut day: reports disagree on the details

Coverage of the first day differs. According to the BBC, the shares dropped as much as 10% early on, then recovered and closed down only 0.12%, valuing Shein at about $26.15 billion.15 Other outlets, citing Reuters, also said the stock finished near flat after the early drop.18 Separately, a summary based on CNBC said the stock fell about 9% on the day, leaving it worth roughly $26 billion.1 The intraday-plunge-then-recovery account has more independent support, and it is the more likely version. The difference matters for another reason: the late recovery looks less like natural demand once you see how hard the underwriters were working to support the price.

Underwriter support, then a further slide

Goldman Sachs was the stabilizing manager. A filing shows its affiliate bought back all 41,998,500 shares that had been borrowed to cover the over-allotment, paying between HK$35.90 and the HK$48.56 offer price. Because of that, the option to buy new shares from Shein expired unused when the stabilization period ended on September 26.6 The Financial Times estimated the cost at about $220 million, or roughly 13% of the float, at an average price near HK$42.23.46 In practice, the underwriter used up its entire price-support allowance.

The support did not stop the decline. On September 14, two weeks after listing, the shares dropped as much as 10% and closed at HK$36.40, 25% below the offer price. Jefferies had just started covering the stock with an "underperform" rating and a HK$26 price target, and Shein was also dealing with product recalls in Australia and New Zealand.10 Jefferies' bad-case scenario put the stock at HK$16. Its best case, built on AI reducing the cost of constantly launching new products and on Shein rebuilding its Guangdong supply base outside China, still reached only HK$45, below the offer price.10

Shein released its first results as a public company on September 28. The next day, Reuters reported the shares fell as much as 14%, taking the company's value to about $17 billion.3 More recent trading puts it at roughly $16 billion.4

What the financial results show

The valuation cut reflects real business problems, not just market mood. Shein's 2025 revenue was $41.85 billion, with $2.06 billion in net income.3 In the first quarter of 2026, however, it lost $99 million, compared with a $395 million profit a year earlier, and operating income fell 26%.20 Second-quarter net income was reported at $2.40 billion, but that figure was inflated by accounting gains on its preferred shares. Adjusted net income was only $228 million, down 66.6% from a year earlier.3

The business model is under pressure from several directions. In May 2025, the US ended duty-free treatment for low-value parcels from China and Hong Kong, so Shein's US shipments now face tariffs and customs costs.7 France has added a fee that can reach 50% of a product's pre-tax price.18 Jefferies also pointed to new parcel rules in both the US and the EU.10 On the positive side, Shein is still huge: it reported 281 million active customers as of March 2026, up more than 16%, and more than a billion orders.12

Some earlier coverage called Shein "profitable" with about $35 billion in revenue.17 Those estimates came before the prospectus was published. The audited figures show a company that is profitable on an annual basis but whose profits fell sharply in 2026 as tariffs and shipping costs hit.

Payouts to private backers

One detail in the deal shows how its costs were split. Investors who bought Shein's pre-D, D and D+ preferred shares had contracts protecting them if the company listed below their purchase prices, and the IPO price triggered that protection.20 Shein agreed to give these investors up to $3.5 billion in cash and shares, almost twice the new money it raised from the IPO. That includes up to $2.2 billion in cash at the bottom of the range, 19.6 million free bonus shares, and about $1.33 billion in additional payments.20 The payments come from Shein's own balance sheet.20 The prospectus describes them as contractual protections, not compensation for the low price.5 Either way, the result is the same: public buyers took the steepest discount, while earlier backers had some of their losses covered.

The founders kept control. The four co-founders own about 59.7% of the economic interest after the IPO but hold about 90% of the votes through a dual-class structure in which Class A shares carry ten votes each. Founder Sky Xu alone owns about 30.3%.35 Only about 6.6% of the enlarged share capital was sold to the public,3 so the float is small and holds very little voting power. Seven cornerstone investors, including Boyu Capital, Tiger Global, General Atlantic, Tencent and UBS Asset Management, committed about $383 million.5

Hong Kong offered the only route left

Shein's path to Hong Kong explains why it accepted these terms. A New York listing stalled amid US-China tensions and political opposition. Shein then filed confidentially in London, but China's regulator never approved that plan. One reported obstacle was Shein's disclosure in the prospectus that links between its supply chain and Xinjiang were a risk factor.7 Hong Kong, which enjoys Beijing's policy support, was in effect Shein's last option.7

Reports differ on the state of Hong Kong's market. One account said new listings were weak, at $3.2 billion in the first half.2 LSEG data cited elsewhere shows about $41 billion raised in 2026, more than double the same period of 2025.5 The LSEG figure fits the BBC's description of Hong Kong as having recovered into one of the largest IPO markets.12 That picture is more credible. Shein still became Hong Kong's largest new share sale of 2026, ahead of Momenta's roughly $751 million offering.5

Analysis

The strength of the Hong Kong market is what makes Shein's results telling. Shein did not struggle because no one was buying IPOs. Investors had money to spend and simply would not pay much for an ultra-cheap fashion business facing tariffs, scrutiny of its supply chain and falling margins. Asked whether the valuation would get a "fast fashion" discount, public investors answered yes, and then cut the price by about another third after the listing.

The lesson for late-stage private companies is that the price set in private rounds, not the company's story, determines how much investors stand to lose.1 For Shein, the next test is whether adjusted profit can recover toward the levels Bloomberg Intelligence assumed. If it doesn't, Jefferies' HK$26 target looks more likely than any return to the offer price.