Shein is expected to float on the Hong Kong stock market imminently at a fraction of its former glory, according to AJ Bell, as the broker tracks interest in the upcoming Asian IPO.
The Chinese fast-fashion retailer, which sells low-cost clothing direct to consumers worldwide, was once valued at around $100 billion but could now list at closer to $25 billion, head of markets Dan Coatsworth has highlighted.
AJ Bell, the UK broker and pensions specialist, holds no formal view on the soon-to-list Asian stock, but, with a note of commentary, Coatsworth highlighted that the float can be seen as a much-diminished version of earlier ambitions.
Hong Kong marks "Plan C" for Shein, Coatsworth said, after a planned US listing stalled amid geopolitical tensions and regulatory concerns, and a subsequent London attempt collapsed over investor unease about ESG issues including worker treatment, compounded by China withholding regulatory clearance.
The anticipated new valuation reset reflects a run of setbacks including the scrapping of the US de minimis customs exemption, which forced Shein to raise prices and has dulled its bargain appeal in Western markets.
At the same time, Shein has been losing ground and market share to its more aggressive rival, Temu, as well as the Iran war, which has disrupted demand, inflated costs and impacted deliveries in some countries.
Coatsworth, meanwhile, pointed to Shein's manufacturing scale, its network of more than 7,500 contract manufacturers, and its 281 million active customers as of 31 March as reasons a cut-price valuation "might present an opportunity for contrarian investors who believe the potential rewards outweigh the long list of risks".
