Shein Seeks $25 Billion Valuation in Hong Kong IPO Amid Market Challenges
Shein's IPO Valuation and Market Context
Current Valuation Target
HONG KONG, Aug 17 (Reuters) - Online fast-fashion retailer Shein is eyeing a company valuation of around $25 billion in its Hong Kong IPO, said three people with knowledge of the matter, down from nearly $100 billion four years ago due to challenging business conditions.
IPO Launch Timeline
Singapore-headquartered Shein, known for selling $5 dresses and $10 jeans to shoppers in about 160 countries, is aiming to launch its much-awaited initial public offering later this week, Reuters has reported.
Valuation Range and Sources
One of the three sources said that the company, which was founded in China in 2012, was looking at a valuation of between $25 billion and $28 billion based on the marketing price band for the offering.
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.
Comparison to Previous Valuation Targets
Recent Valuation Adjustments
The latest company valuation target is also lower than $30 billion-$40 billion that Shein was aiming for at the beginning of this month and soon after it kickstarted investor meetings, Reuters reported on August 4.
Investor Sentiment
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.
Implications of Lower Valuation
Impact on Financials
Pre-IPO Investor Agreements
A lower valuation could weigh on Shein's financials 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; Editing by Sumeet Chatterjee, Christian Schmollinger and Sam Holmes)
