Shein shares recover after 10% fall on debut

By the Editorial Team · Wednesday, September 2, 2026

Shein Global Holdings raised approximately US$1.7 billion in its Hong Kong IPO, valuing the company at about US$26 billion, though its shares closed slightly below the offering price after an initial decline. The offering highlights investor concerns over Shein’s shrinking profitability, intensified competition, and regulatory challenges, even as the company plans to use proceeds to enhance technology and expand its global presence.

Shein Global Holdings saw its shares decline as much as 10 percent during its Hong Kong trading debut on September 25, before recovering to close just below the initial public offering (IPO) price at HK$48.50, a 0.1 percent drop. The fast-fashion e-commerce company raised HK$13.6 billion (approximately US$1.7 billion) through the offering, marking the fourth largest IPO in Hong Kong this year. The sale valued Shein at about US$26 billion, a significant decrease from its peak valuation of nearly US$100 billion in 2022.

The company's IPO followed prior unsuccessful attempts to go public in the United States and the United Kingdom. After moving its headquarters to Singapore in 2021, Shein opted for a Hong Kong listing amid regulatory and market challenges in Western capital markets. The offering was oversubscribed, with the retail portion exceeding 5 times demand, though institutional subscription was comparatively weaker.

Shein’s shares opened at the IPO price of HK$48.56 but dipped early in the session, reflecting investor caution amid concerns over the company’s profitability and competitive landscape. According to the company’s prospectus, annual revenue growth remained above 40 percent between 2021 and 2023, but net income growth was significantly slower at a compound annual rate of 14.2 percent. The company reported a US$99 million loss in the first quarter of 2026, a sharp reversal from the US$395 million profit recorded in the same period a year earlier.

Several factors have impacted Shein’s recent performance. The end of tax exemptions for small packages entering the United States and Europe has eroded its cost advantages in key markets. Additionally, rising tariffs on Chinese goods in the US, including levies ranging from 10 to 87.5 percent, have increased operating costs. The repeal of the US "de minimis" rule for shipments valued at US$800 or less, which had previously allowed duty-free entry, also weighed heavily on sales.

Competition has intensified from rivals like PDD Holdings’ Temu and Alibaba’s AliExpress, which have eroded Shein’s market share, particularly in the United States. Once commanding about half of the US fast-fashion market during the height of the COVID-19 pandemic, Shein's share had declined markedly by late 2022.

In an effort to address these challenges, proceeds from the IPO are intended to fund technological improvements and expand the company’s global brand presence. The listing ceremony was attended by Shein founder Sky Xu Yangtian, though chief financial officer Leigh Gui spoke publicly on behalf of the company, emphasizing a commitment to innovation, compliance, transparency, and environmental, social, and governance principles.

Shein also disclosed that it will pay approximately US$1.33 billion to holders of pre-existing preference shares to compensate early investors. Seven cornerstone investors, primarily existing backers, subscribed to around US$383 million worth of shares but were reported to be facing paper losses based on post-IPO trading.

The company continues to face regulatory scrutiny; the US government is reviewing Shein’s recent US$80 million acquisition of clothing retailer Everlane for potential national security concerns related to personal data. Meanwhile, global trade tensions and evolving regulations in major markets such as the European Union remain ongoing risks.

Shein’s IPO debut reflects both investor interest in fast-growing e-commerce platforms and caution about the company’s profitability and external challenges. The stock’s performance underscores uncertainties around its valuation and growth prospects amid increasing competition and regulatory headwinds.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.