Shein's initial public offering is being valued at less than $30 billion. Four years prior, its valuation was $100 billion.

      Shein's advisers are seeking a valuation of under $30 billion for its Hong Kong IPO, which marks a nearly 70% decrease from its more than $100 billion valuation during a 2022 fundraising. The company has set an internal target of $30 billion but may need to consult current investors if it prices lower. Reports indicate investors are interested in a valuation in the mid-to-high twenties. Following Chinese regulatory approval last month, the company is moving forward after previously unsuccessful attempts to list in New York and London.

      The financial performance justifies the reduced valuation. Net profit rose to $3.4 billion in 2024 but dropped to $2 billion last year, while profit margins halved from 8.7% to 4.9%. In Q1 2026, Shein faced a net loss of $99 million and highlighted the potential impact of US and EU trade tensions in its filing for the Hong Kong exchange. The company's model, which relied on tax exemptions for packages under $800 entering the US without duties, has been undermined, as tariffs now apply and similar exemptions in the EU have been closed. These tariffs have altered the landscape for Chinese companies trying to access Western markets across various sectors.

      Unexpected competition has arisen from Temu, backed by PDD Holdings, which has adopted Shein’s factory-direct model and is underpricing it. Additionally, air freight costs have increased. Sources close to the IPO roadshow have warned that Shein might find it difficult to attract large Chinese institutional investors, a rare challenge for a Chinese company going public in Hong Kong. Although Shein manufactures in China, its corporate headquarters is in Singapore, which does not completely satisfy investors from either location.

      With Chinese firms increasingly entering Hong Kong amid tightening Western markets, Shein represents the latest addition. However, its situation is worsened by slowing revenue growth, declining profits, a hostile regulatory environment in the US and EU, and emerging competition that did not exist three years ago. Goldman Sachs, Morgan Stanley, and JPMorgan are at the helm of the offering, and Shein has not provided any comment on the situation. The stark contrast between a $100 billion valuation and a target below $30 billion not only reflects a valuation adjustment but also serves as a clear indication of the changes that can occur when the favorable conditions that supported a business – such as pandemic shopping, inexpensive shipping, and tax advantages – all shift dramatically.