Shein received approval from China's securities regulator on Friday for a Hong Kong initial public offering, clearing a major obstacle in its years-long effort to go public. The company expects to issue 341.6 million H shares in the offering, according to the China Securities Regulatory Commission.
A listing could come together as early as the third quarter of this year, with the company targeting a valuation of $40 billion to $50 billion, according to The Wall Street Journal. Shein is scheduled to appear before the Hong Kong Stock Exchange's listing committee on Thursday, according to Reuters. Approval from the listing committee would open the door to roadshows and the bookbuilding process.
Friday's regulatory sign-off closed out a roughly twelve-month wait that began when Shein quietly submitted its Hong Kong listing application last July. Despite having moved its base of operations to Singapore, Shein remained subject to Chinese regulatory oversight because the vast majority of its merchandise is produced by contract factories on the Chinese mainland.
Shein's path to a public listing has been complicated by geopolitical tensions. A November 2023 filing for a U.S. listing ultimately went nowhere, as scrutiny from Capitol Hill and federal regulators over the company's sourcing and labor record proved insurmountable. London was the next destination, and while the Financial Conduct Authority signed off on a draft prospectus, Beijing again refused to grant the necessary authorization, according to Reuters.
According to Nikkei Asia, Beijing's wariness toward Shein stemmed from a combination of factors: a damaging scandal in France, documented concerns about conditions at supplier factories, and the intensifying friction over Chinese goods in Western markets. The rollback of duty-free treatment for small-value shipments from China, along with new U.S. tariffs, compounded the strain on Shein's cross-border retail operation, according to The Wall Street Journal.
Founded by Sky Xu in Nanjing in 2012, Shein sells apparel in more than 160 countries. A 2023 fundraising round put Shein's worth at roughly $66 billion, but ongoing rivalry with platforms such as Temu and a fraught geopolitical environment have since eroded that figure. For Hong Kong's equity markets, a successful Shein debut would underscore the city's revival as a premier global destination for new listings.