For its planned Hong Kong IPO, online fast-fashion group Shein is presenting prospective investors with a valuation in the mid-to-high $20 billion range, according to the Financial Times.
The latest range is another reduction in expectations for the Singapore-headquartered company, which was valued at $98.2 billion in a 2022 funding round and about $66 billion in 2023. According to Reuters, Shein was still seeking a valuation ranging from $30 billion to $40 billion as recently as last week.
The float could reportedly launch as early as next week, although its final valuation and timing remain subject to investor demand. Shein secured approval from Chinese regulators to pursue the Hong Kong listing in July, after earlier attempts to float in New York and London.
Profit decline puts pressure on valuation
Shein’s listing documents showed that revenue increased 8% to $41.8 billion (£31 billion) in 2025, while net profit fell 38.7% from $3.37 billion (£2.49 billion) to $2.06 billion (£1.52 billion).
Performance weakened further during the first quarter of 2026. For the three months ending in March, the group reported a $99 million (£74 million) net loss, compared with a $395 million (£296 million) profit a year earlier, while revenue edged 1.1% higher to $9.05 billion (£6.78 billion).
The loss included a $328 million (£246 million) accounting charge linked to special investor shares, so the reported figure did not reflect trading alone. However, US revenue fell from $2.38 billion (£1.76 billion) to $2.04 billion (£1.51 billion) as changes to import rules affected Shein’s direct-to-consumer model.
In May last year, the US removed a so-called “de minimis” tariff exemption on small packages, which Shein had previously used to ship garments from China directly to customers.
Shein said: “Since May 2025, the removal of the US de minimis exemption has had an adverse impact on our sales in the US and the overall growth of our net revenues.”
It said it had “since observed signs of normalisation in consumer purchasing behaviour and sales trends in the US”.
European duties add to costs
Earlier this month, the EU also made the same move by imposing a three euro (£2.56) duty on small parcels imported from outside the trading bloc.
The group added that the EU’s removal of the small parcel exemption may also have a “material adverse effect on our business, financial condition and results of operations”.
Given that Shein made around a third of sales from Europe last year, it said the impact on the group could be larger than that from the US hit.
“Although it remains too early to fully assess, it is possible that trends in the EU could be generally in line with or exceed the impact observed in the US after the removal of the US de minimis exemption,” Shein cautioned.
The group said it was looking at raising prices across the US and Europe to offset the sales impact. Higher prices could weaken one of its central competitive advantages as investors assess the durability of its growth and margins.
The UK is also looking to close the small parcels loophole, but not for some years.
Former Chancellor Rachel Reeves confirmed plans in the 2025 autumn budget to follow in the footsteps of the US and Europe and review the customs loophole, saying she wants to “support a level playing field in retail”.
But the proposed reforms are not expected to be in place until 2029, which has prompted calls from high street retailers to bring this forward.
The IPO has also faced scrutiny over Shein’s supply chain and sourcing practices, including working conditions at supplier factories.
A valuation below $30 billion would leave the business worth less than one-third of its 2022 funding-round level as it makes its third attempt to enter public markets.