Exclusive-Shein cuts company valuation to around $25 billion in Hong Kong IPO, sources say

By Summer Zhen and Kane Wu

HONG KONG, Aug 17 (Reuters) - Online fast-fashion retailer Shein is eyeing a company valuation in its planned Hong Kong IPO of just a quarter of the nearly $100 billion number seen in a share sale four years ago, sources said, as its growth has slowed.

Two people familiar with the situation said Shein's value was likely to be around $25 billion in the IPO, while a third source said the company was looking at a valuation of between $25 billion and $28 billion, based on the marketing price band for the offering.

That's down from the $30 billion to $40 billion range Reuters reported Shein was aiming for at the start of this month, soon after it began investor meetings on the issue.

The valuation decline since 2022 comes as Shein's biggest markets began a crackdown on e-commerce platforms selling cheap Chinese-made goods, hurting the company's growth prospects.

Founded in China in 2012 and known for selling $5 dresses and $10 jeans to shoppers in about 160 countries, Shein is aiming to launch its much-awaited initial public offering later this week, Reuters has reported.

REGULATORY SCRUTINY AND INTENSIFYING COMPETITION

Shein is planning to issue up to 8% of its total shares in the IPO, a fourth person with direct knowledge of its plans said. A $25 billion valuation would translate to an offering size of up to $2 billion.

The sources declined to be named as they were not authorised to speak to the media ahead of a public announcement of the deal terms. A spokesperson for Shein did not immediately respond to a Reuters request for comment.

Shein's net income in 2025 was $2.06 billion, so a $25 billion price tag would mean investors value Shein at around 12 times earnings.

Shein's steep valuation downsizing underscores how slower growth, higher trade costs, tighter regulatory scrutiny and intensifying competition have dampened investor appetite for the company.

Shein's net revenue grew 41.1% in 2023 and 20.7% in 2024, but growth slowed to just 8% last year, for total revenue of $41.8 billion. In the first quarter of this year revenue grew just 1.1%, due to the impact of U.S. customs duties and tariffs imposed since May last year.

LOWER VALUATION

Some investors who attended IPO presentations or reviewed recent financial statements have told Reuters they were not convinced Shein could return to the growth rates that valued it at $98.2 billion in a 2022 fundraising round.

Shein swung to a $99 million quarterly loss in the first quarter of 2026 as sales slowed, and it took $328 million in fair value losses on its convertible shares, according to its filings to the Hong Kong Stock Exchange in July.

A lower valuation directly impacts the split of shares between Shein's founders and investors, as under the terms of its IPO filing, the company would be required to provide extra shares to certain pre-IPO investors if the valuation falls below agreed thresholds.

(Reporting by Summer Zhen and Kane Wu in Hong Kong; additional reporting by Helen Reid in London; Editing by Sam Holmes and David Holmes)