Shein’s debut on the Hong Kong Stock Exchange did not convince investors. On the first day of trading, shares of the fast fashion giant lost around 8%, falling to 44.6 Hong Kong dollars compared to the placement price of 48.56 dollars.
The company’s capitalization thus fell to around $24 billion. In 2022, during a previous private financing round, Shein was valued at nearly 100 billion.
The comparison does not mean that the company lost 76 billion in a single session: it does, however, show how much expectations on its growth have changed in four years. The most worrying sign is that investors sold the stock even though the valuation had already been reduced by around 75%.
Shein debuts on the Hong Kong Stock Exchange
Shein placed 280 million shares, raising 13.6 billion Hong Kong dollars, or about 1.74 billion US dollars. It is one of the largest prices achieved this year on the Asian market.
There was no shortage of demand, but it was modest compared to the most popular IPOs in Hong Kong. The portion intended for private investors was subscribed 5.63 times and the international one 2.59 times. The most popular operations in the artificial intelligence and robotics sectors have, however, recorded requests hundreds of times greater than supply.
The weakness had already emerged in informal trading prior to the debut, when the stock had lost more than 10%. In the official session the decline stood at around 8%, while the Hang Seng index lost around 0.6%.
The market has therefore penalized Shein much more than the price list on which it debuted.
Because Shein is worth much less than in 2022
The model that allowed Shein to grow rapidly was based on selling thousands of items online at extremely low prices, produced in small batches and shipped directly from China to consumers.
This system allowed the company to follow trends identified through data collected online almost in real time, limiting inventories and reducing the costs of physical stores. But some of the advantages on which the model was based are disappearing.
The United States has eliminated the “de minimis” customs exemption for shipments valued under $800. The European Union has also introduced new charges on small parcels, directly affecting platforms that send individual orders from China.
The consequences are higher duties, higher logistics costs and the need to increase prices. The risk is that Shein loses the very element that made it competitive: a very large price difference compared to traditional brands.
Shein at a loss, sales in the United States collapse
Scaling isn’t just about expectations. In the first quarter of 2026, Shein recorded a net loss of $99 million, compared to a profit of $395 million in the same period a year earlier.
The result was affected by a non-monetary accounting charge of 328 million dollars, but also by the weakening of the business. Revenue grew just 1.1% to $9.05 billion.
In the United States, one of the most important markets for the group, sales decreased by 14.3%, from 2.38 to 2.04 billion. The American share of total revenues thus fell from 29.4% in 2023 to 22.5%.
The company also expects first-half operating margin to be slightly lower than in the first quarter, due to duties, tariffs and higher logistics costs in Europe and the Middle East.
The controls that blocked Wall Street and London
Shein reached Hong Kong after abandoning its listing first in New York and then in London. The projects have been hampered by supply chain controls, tensions between the United States and China and disputes over trade and environmental practices.
The group is under investigation by the European Commission and the US Federal Trade Commission. In the past it has received sanctions in France for alleged false discounts and in Italy for greenwashing.
Despite the sharp downsizing, some investors still consider the valuation high. Shein trades at around 15 times expected earnings, more than double that of Pdd, owner of competitor Temu.
What Shein will do after the listing
Shein will use much of the resources raised for technology, marketing and international expansion. It is also trying to depend less on own-brand fast fashion, expanding the marketplace for external sellers and offering logistics and supply chain management services.
The group acquired Missguided in 2023 and Everlane in May 2026, in an attempt to reach different market segments.
The listing finally offers liquidity to investors entering the years of the fastest growth, but the negative debut shows that for the market Shein is no longer a platform destined to grow at any cost. It is a mature company that must demonstrate that it can defend margins and prices in a world with more tariffs, controls and competition.
