Shein shares slump in Hong Kong market debut - Inside Retail Asia

Shares in online fast-fashion retailer Shein fell 8 per cent in their first day of Hong Kong trade. (Source: Reuters/Tyrone Siu) By Reuters September 1, 2026 Text Size --> Shares in online fast-fashion retailer Shein fell 8 per cent in their first day of Hong Kong trade on Tuesday, with investors worried about the impact of setbacks that long delayed its listing and have undermined its competitive advantages. Known globally for selling $5 tops and $10 dresses, Shein has been humbled by tariff and duty changes in the US and Europe. Intense scrutiny of its business practices in the West also hampered its attempts to list in New York and London, which were ultimately blocked by Chinese authorities. The stock was trading at around HK$44.6 in morning trade, valuing the company at around US$24 billion, far below its 2022 peak of nearly $100 billion. Hong Kong’s Hang Seng Index was down 0.6 per cent. “As a new company listed in Hong Kong, we will continue to innovate, optimise, and cooperate with our supply chain partners for mutual benefit and win-win results,” Shein CFO Leigh Gui said at the opening gong ceremony. Valuation still seen as expensive Founder and CEO Sky Xu, known for disliking the limelight, did not speak at the event though later took pictures with Shein employees on stage. He declined to respond to Reuters ‘ questions. “I think the weak debut shows that even after the huge valuation reset, investors still don’t see Shein as obviously cheap,” said Charu Chanana, chief investment strategist at Saxo. Chanana said Shein was valued at 15 times forward earnings, more than double the mutiple for PDD, the owner of rival Temu, which meant “investors were being asked to pay a premium despite weaker growth visibility and significant regulatory and trade risks.” Demand for Shein’s stock during the IPO was tepid compared to high-profile offerings from the AI and robotics sectors. The retail tranche was subscribed 5.63 times, while the international portion was subscribed 2.59 ​times. Some deals have been hundreds of times oversubscribed, especially from Hong Kong’s army of retail investors who track IPOs very closely. The amount sold in the IPO represents about 6.6 per cent of Shein’s enlarged share capital. Cornerstone investors took about one-fifth of the IPO and are locked up for six months, leaving roughly 5 per cent freely tradeable. First-quarter loss, new strategies Last year, the US ended the de minimis duty exemption for e-commerce shipments under $800 that had powered Shein’s direct-shipping model. The European Union recently followed suit, imposing fees on low-value packages. Shein’s net income slid 39 per cent last year and it swung to a loss in the first quarter . Shein has said it expects first-half operating profit margin to be slightly lower than in the first quarter, hurt by higher customs duties, tariffs, fees and logistics costs in Europe and the Middle East. “New markets could help offset slower growth in the US and Europe, but lower spending power in developing markets may limit the benefit if delivery costs stay high,” said Lorraine Tan, director of equity research at Morningstar. Shein has been trying to widen beyond its own-label ultra-cheap fast fashion, having expanded its third-party marketplace and bought US apparel brand Everlane in May. In its prospectus it said it aims to offer marketplace and supply chain services to more brands, in the footsteps of French brand Pimkie and British brand Missguided, which it bought in 2023. The IPO has helped Shein compensate early investors who invested at much higher valuations. The company has agreed to make cash payments totaling about $3.5 billion and share adjustments to some preferred shareholders. “This IPO is not just a fundraising event – it is also, and probably more of, a capital-structure event,” said Jianggan Li, CEO of consultancy Momentum Works. Reporting by Yantoultra Ngui, Selena Li, Kane Wu and Summer Zhen in Hong Kong, Helen Reid in London and Casey Hall in Shanghai; Writing by Scott Murdoch; Editing by Sumeet Chatterjee and Edwina Gibbs, of Reuters. Recommended By IR Strategy IR Pro Kelly Cook on leadership, learning and her journey to CEO of David’s Bridal Nicole Kirichanskaya Electronics & appliances IR Pro How this consumer electronics chain connects online and in-store Richard Taylor Strategy IR Pro How 1-800-Contacts exec Amy Larson is fighting for affordable eyewear Nicole Kirichanskaya Travel retail Chanel opens duplex flagship in Seoul My Nguyen Supply chain IR Pro How Cotton On Group’s supplier conference is its secret weapon to global growth Stephanie Caite Chadwick Luxury IR Pro Making Ssense of it all: The $4b collapse is the end of an era in online luxury Nick Gray