Shein shares slide as much as 10% in Hong Kong debut

Shein shares slid as much as 10 percent during its Hong Kong trading debut on Tuesday, falling below the initial offer price. The fast-fashion giant's stock opened at HK$48.50, slightly below the HK$48.56 pricing set for the offering, which raised HK$13.6 billion and valued the company at just over $26 billion. The listing marked a major milestone for Shein, which had been seeking to go public for several years. The weak performance contrasts sharply with the success of other recent Asian IPOs, such as memory-chip maker CXMT and humanoid robot maker Unitree, both of which saw share prices rise over 400 percent on their debut days. Analysts noted that investor interest in consumer-facing companies has waned compared to technology stocks, which continue to attract strong demand. William Bratton, head of cash equity research for Asia-Pacific at BNP Paribas, remarked that the appeal of consumer sectors appears limited in the current market climate. Shein’s valuation has declined significantly from its peak. During the pandemic, lockdowns and social media trends around “Shein hauls” drove demand for its affordable fashion items, pushing the company’s valuation to approximately $100 billion following a 2022 private fundraising round. However, investor enthusiasm began to diminish later that year, leading to a subsequent fundraising that valued the company at $66 billion. The company had previously attempted to list in New York and London but faced opposition from politicians and regulators due to concerns over its Chinese supply chain. It was only in July that Chinese authorities approved its application for a Hong Kong listing. Now among the largest listed fashion groups globally, Shein’s valuation is comparable to that of Swedish retailer H&M, though both lag behind Zara owner Inditex, which has a market cap of about $213 billion. Kenny Ng, a strategist at Everbright Securities International, highlighted the challenges Shein has encountered in recent years. These include ongoing trade investigations in the EU and US, as well as the loss of a key tax advantage that had supported its operations. Financial reports show that Shein’s profitability has declined. Net profit dropped to $2 billion last year, down from $3.4 billion in 2024. Profit margins also contracted, narrowing from 8.7 percent to 4.9 percent over the same period. In the first quarter of last year, the company recorded a net loss of $99 million, citing risks posed by U.S. and EU trade tensions. In May 2025, Washington revoked a tariff exemption that allowed Shein to ship clothing directly to U.S. customers. The EU followed suit, closing a similar loophole earlier this year. Goldman Sachs, acting as the stabilization manager for the IPO, is believed to have intervened in the late stages of trading to support the stock price. This move came as the market struggled to find immediate traction for Shein’s shares. Despite these challenges, the company remains a dominant player in the global fashion industry, navigating complex regulatory landscapes and shifting consumer sentiments. Its future will depend on how effectively it can adapt to evolving trade policies and regain investor confidence.