Shein’s long-awaited Hong Kong debut turned sharply negative on Tuesday, as shares fell as much as 10% despite an initial public offering that attracted more orders than shares available. The stock opened at its HK$48.56 offer price, then slid to about HK$43.80 in early trading, before closing down around 8%, according to reports.
The fast-fashion group raised approximately HK$13.6 billion ($1.7 billion) in the listing, valuing the company at about $26.5 billion. That marked a dramatic reset from the nearly $100 billion valuation Shein achieved in 2022.
Demand was modest by Hong Kong standards. Shein’s retail offering was subscribed 5.63 times, while the international tranche was covered 2.59 times. Analysts pointed out that recent Hong Kong deals have been oversubscribed hundreds of times. The stock also listed at more than 15 times forward earnings, roughly double PDD’s multiple and above the Hang Seng Index.
Saxo chief investment strategist Charu Chanana told Reuters that the weak debut showed investors still did not see Shein as “obviously cheap” even after its enormous valuation reset. She said the market was increasingly treating the company as a retailer facing margin and execution pressure rather than a disruptive high-growth platform. Allspring Global Investments portfolio manager Gary Tan made a similar point, saying the stock was already pricing in “part of a growth comeback” before Shein had delivered one.
Tariffs and regulatory risks have changed Shein’s growth economics. The company previously benefited from the US de minimis duty exemption on low-value packages, but Washington ended that exemption last year and the European Union has also imposed charges on low-value parcels. Those changes have increased costs: Shein’s net income fell 39% last year, and the company swung to a first-quarter loss of $99 million. Competition from Temu and AliExpress has intensified, while regulatory scrutiny continues in major Western markets.
The trading backdrop added pressure. Investor enthusiasm in Hong Kong and China has concentrated on AI, robotics and memory-chip listings. Pepperstone head of research Chris Weston said the contrast with recent technology offerings showed where investors currently want exposure. uSMART Securities research executive director Dickie Wong said he had “never been bullish on this IPO,” citing weak revenue growth and benefits flowing to earlier investors.
The IPO itself represented about 6.6% of Shein’s enlarged share capital. Cornerstone investors face a six-month lock-up, leaving roughly 5% of the company’s shares freely tradable at debut. HKEX introduced weekly and monthly options alongside the listing and confirmed Shein would be eligible for short selling from its first trading day.
