Shares of online clothing retailer Shein (HK: 0625) fell 9% in their Hong Kong market debut on September 1.
The initial public offering (IPO) of Shein saw tepid demand from investors, with the fast-fashion company’s valuation coming in much lower than anticipated.
Singapore-based Shein sold 280 million shares in its IPO, raising the equivalent of $1.74 billion U.S. after the final offer price was set at HK$48.56 per share.
The IPO valued Shein at $26.5 billion U.S. That’s only about a quarter of the $100 billion U.S. that the company was valued at in 2022 during a funding round.
Analysts said that Shein and its main rival Temu have seen their business hurt by U.S. tariffs and other import duties, as well as an increasingly crowded online shopping sector.
Investors appear to be taking a cautious approach with Shein and waiting until the company reports some financial results and discloses more information about its balance sheet.
In the first quarter of this year, Shein reported revenue of $9.05 billion U.S. but swung to a net loss of $99 million U.S. from a profit a year earlier.
Shein’s Hong Kong IPO took place after attempts to go public in New York and London fell through. The government in China, where Shein was founded, blocked the previous IPO efforts.
Management at Shein said they plan to use about 40% of the IPO proceeds to enhance the company’s technology and the remainder to boost brand awareness and run the business.
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