Fast-fashion giant Shein's shares drop 9% in Hong Kong market debut

Shares of Shein fell 9% in their Hong Kong trading debut Tuesday, after a tepid IPO that saw the fast-fashion giant’s valuation drop to nearly a quarter from its peak.

The Singapore-headquartered, company sold about 280 million shares in its initial public offering, raising around 13.60 billion Hong Kong dollars ($1.74 billion) after the final offer price was set at HK$48.56 per share, below the maximum offer price of HK$49.5.

The IPO values Shein at around $26.5 billion, compared with its private market valuation of $100 billion in 2022. 

From a retail perspective, Bryan Gildenberg, managing director of Retail Cities, pointed to the changing competitive landscape facing Shein. “If I were Shein, [that] would probably be my biggest concern,” Gildenberg told CNBC’s “The China Connection.”

He pointed to TikTok Shop’s “entertainment first, commerce second” approach, saying Shein and Temu had enjoyed a first-mover advantage in “gamified discount hunting,” but TikTok could offer shoppers some of the same “excitement, enjoyment and treasure hunt.” 

Gildenberg said Shein and Temu were “getting caught up a little bit, particularly by TikTok.” 

Brendan Ahern, CIO of KraneShares, told CNBC’s “Squawk Box Asia” on Tuesday that investors may be cautious on Shein in the short term, with some likely to “sit on the sidelines” until there is further clarity on the company’s second-quarter results and balance sheet.

Ahern said much of Shein’s growth had been driven by sales to U.S. and European consumers, but tariff changes in both markets have made that more challenging, with revenue decelerating and margins coming under pressure.

Shein’s Hong Kong debut comes after earlier attempts to go public in New York and London did not materialize. The China-founded company, which moved its headquarters to Singapore in 2022, first filed confidentially for a U.S. IPO in 2023 before turning to London, where Beijing withheld approval over risk disclosures tied to its China supply chain, effectively blocking the listing.

Shein plans to use 40% of the IPO proceeds to enhance its technology capabilities and another 40% to boost brand awareness and strengthen its global presence, with the remainder going toward corporate responsibility initiatives and general corporate purposes, according to its prospectus.

Shein reported net revenue of $41.8 billion in 2025, compared with $38.7 billion a year earlier, its prospectus showed.

In the first quarter of this year, Shein reported revenue of $9.05 billion and swung to a net loss of $99 million from a profit a year earlier. The company attributed the loss mainly to fair-value losses on its convertible redeemable preferred shares, as per its prospectus.