Shein clothing hangs at the fashion retailer’s office in Sao Paulo, Brazil, last December.Jorge Silva/Reuters
Shares of online fast-fashion retailer Shein slumped more than 10 per cent in gray-market trading on Monday, one day ahead of its Hong Kong Stock Exchange debut.
The company raised US$1.7-billion at HK$48.56 a share, valuing it at about US$26.5-billion, according to sources who declined to be identified. Official pricing is due to be announced later on Monday.
Within a few minutes after the start of gray-market trading, major Hong Kong brokers – Futu Securities, Bright Smart and Phillip Securities – quoted the shares as having dropped over 10 per cent.
Gray market prices are quoted by brokerages ahead of a security being officially traded on an exchange.
How fast fashion retailer Shein had to make peace with China to finally go public
At Futu, Hong Kong’s biggest retail brokerage by volume, Shein’s stock was last traded around HK$42, according to its mobile app.
Shein’s valuation has dropped to slightly above a quarter of its nearly US$100-billion private market peak in 2022, hit by tariff and duty changes in the U.S. and Europe that have undermined the foundations of its business.
The sharp valuation cut reflects “caution among both retail and institutional investors. Investors see greater potential in AI and robotics themes than in fast fashion at the moment,” said Bevis Ho, senior analyst at Futu Securities.
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