Shein to Raise Up to USD1.8 Billion in Hong Kong IPO - 一财全球Yicai Global

The China-founded company initially focused on cross-border women’s apparel, with the “Shein” brand launching in 2013. It confidentially filed to go public in New York in 2023 and in London in 2024, but both attempts stalled because of geopolitical headwinds and cross‑border regulatory requirements, so the firm pivoted to Hong Kong.

Industry observers are optimistic about the company's prospects, citing the maturity of Shein’s pioneering large-scale automated test and re-order business model, which has created a significant operational moat, and the growth potential of the global fashion market.

But Shein also faces policy risks in overseas markets and intensifying competition in the cross-border sector, they said, adding that navigating growth hurdles and external uncertainties poses a long-term challenge for Shein as the business moves beyond its initial phase of rapid expansion.

The prospectus says Shein has responded to major regulatory changes, including the removal of the United States’ de minimis import exemption and the European Union’s customs duty relief for low-value consignments, through measures such as selective price increases and the expansion of localised inventory. The firm is also tweaking its business model and operational efficiency to counter pressures and uncertainties arising from fading growth tailwinds.

Shein had about 273 million active customers in around 160 markets at the end of last year, it said. Net profit stood at USD2.8 billion in 2023, USD3.4 billion in 2024, and USD2.1 billion last year, on revenue of USD32.1 billion, USD38.7 billion, and USD41.8 billion, respectively.

Sky Xu, founder and chief executive, will hold around 30 percent of the issued shares worth HKD61.2 billion to HKD63.7 billion. The prospectus shows that Shein will have a weighted voting rights structure post-listing, with Xu commanding about 49.9 percent of the voting rights, increasing to 90 percent when combined with those of his three co-founders, with whom he set up the business in 2012.

Goldman Sachs, Morgan Stanley, and JPMorgan are joint sponsors and global coordinators for the IPO, while Boyu Capital, Tiger Global, General Atlantic, Tencent Holdings, Greenwoods Asset Management, Taikang Life Insurance, and UBS Asset Management Singapore are the cornerstone investors.

Editors: Tang Shihua, Martin Kadiev