Shein's Hong Kong Listing Clears a 4-Year Turbulence—Will It Shake Up South Korea's ...

The CSRC approved the deal and cleared the issuance of 341.6 million shares; the company’s valuation is expected to land at $40 billion to $50 billion, far below the $100 billion peak in 2022. China’s ultra-budget fashion platform Shein received approval from the China Securities Regulatory Commission (CSRC) to list on the Hong Kong Stock Exchange on the 10th (local time). According to a notice posted on the CSRC website, Shein will be allowed to issue up to 341.6 million shares and must complete the entire issuance and listing process within 12 months. With that, Shein has locked in its final path toward an initial public offering (IPO) in Hong Kong after a four-year push to go public. New York → London → Hong Kong… Approval after 4 years of frustration Shein’s IPO drive did not go smoothly. It first tried to list on the New York Stock Exchange (NYSE) in 2022, but the plan was blocked by the U.S. Congress. That was around the time U.S. scrutiny of Chinese companies was at its peak. Shein then pivoted to London in 2025. It secured approval from the U.K. Financial Conduct Authority (FCA), but Chinese authorities moved to halt it this time. That’s because in 2023, China tightened overseas listing review rules, making overseas listings impossible without the CSRC’s prior approval. In the end, Shein turned its attention to Hong Kong. It was reported to have submitted a confidential listing application to the Hong Kong Exchanges and Clearing in June last year, and this CSRC approval allowed it to clear the final hurdle. The company’s valuation expected from this Hong Kong IPO is in the range of $40 billion to $50 billion (about KRW 60 trillion to KRW 75 trillion). That is less than half of the $66 billion valuation during the 2022 funding round and far below the $100 billion peak that had been mentioned in the market at one point. Annual revenue of $38 billion and a sharp 40% drop in net profit… A shadow over growth Shein’s 2024 revenue rose to $38 billion (about KRW 57 trillion) year over year, but net profit plunged to $1 billion, a 40% drop. The impact came as the “de minimis” policy for duty-free imports of low-priced goods—an essential part of its ultra-budget strategy—was abolished or restricted in the United States, driving costs up sharply. Once the structure that allowed imports without tariffs, even for just a single item, broke down, the price competitiveness Shein offered U.S. consumers was severely damaged. That is when the core mechanism that had let Shein sell shirts for less than $5 began to wobble. As the U.S.-China trade war drags on, the cost pressure in North America, Shein’s main market, is likely to persist going forward. In South Korea, it fizzled into “flash popularity” Shein set up its Korean corporation in December 2022 and announced its official entry into the Korean market in June 2024. The company deployed an aggressive marketing campaign, including naming actress Kim Yoo-jung as a global promotional ambassador for its sub-brand DAZY and opening a pop-up store in Seongsu-dong. But the response in the domestic market fell short of expectations. Controversy erupted after products alleged to have copied overseas brand designs were found on the first day of the pop-up store, and app new-install figures also lagged behind ZIGZAG, Musinsa, and Ablee. Analyses said confidence in product quality and the controversy over design copying did not meet Korean consumers’ “gasim-bie” 기준—psychological satisfaction relative to price. From an investor’s perspective, what Shein’s Hong Kong IPO means Shein’s Hong Kong IPO is targeting completion this fall. If the listing goes through, it will become a landmark deal in the IPO market, which had been depressed for years from the perspective of the Hong Kong Stock Exchange. The timing is striking: on the same day that the U.S. stock market’s SK hynix ADR set the record for the largest-ever overseas corporate IPO of $26.5 billion, Shein also received approval for its Hong Kong IPO. One side wins premium valuations on the Nasdaq with semiconductors and AI as the weapons; the other chooses a compromise listing in Hong Kong using ultra-budget fast fashion. Domestic fashion and e-commerce investors should pay close attention to what Shein’s Hong Kong listing would mean. After listing in Hong Kong, Shein could reinvest the funds it raises into expanding across Asia, including South Korea. That would be a variable that could intensify competition again with domestic fashion platforms such as Musinsa, Ablee, and ZIGZAG. On the other hand, the strengthening of U.S. tariff barriers has already damaged Shein’s global cost structure, which could also give domestic companies some breathing room in a certain sense. ※ This article is for investment reference only, and investment decisions and the results that follow are solely the responsibility of the investor. The Connect Money does not assume legal responsibility for readers’ investment losses. #China e-commerce #Musinsa Ablee competition #SheinHongKong #fast fashion #CSRC approval #fashion platform #fashion of tariff war #CSRC China Securities Regulatory Commission #Shein Korea #company valuation of $40 billion to $50 billion #Musinsa Ablee #Shein Hong Kong IPO approval #Shein Korea market #U.S. elimination of low-value tariff exemptions #Shein IPO #Hong Kong stock market IPO person Kang Won-seok wonseokk@theconnectmoney.com