Fast-fashion giant Shein is preparing to confidentially file a draft prospectus for a planned initial public offering (IPO) in Hong Kong, according to three individuals familiar with the matter. This move marks a significant deviation from the typical practice in the territory, where major IPO applicants such as Xiaomi and Meituan have traditionally opted for public filings.
Sources indicate the China-founded retailer is aiming to submit the draft as early as this week, with one suggesting a Monday deadline. If accepted, the confidential filing would require a waiver of one of the Hong Kong Stock Exchange’s principal listing regulations—an exceptional measure that underscores the unique regulatory complexities surrounding Shein’s public offering.
The proposed listing in Hong Kong follows previous unsuccessful attempts to go public in the United States and the United Kingdom, where regulatory hurdles, including lack of approval from the China Securities Regulatory Commission (CSRC), impeded progress. Reuters previously reported that Shein’s London IPO bid had gained support from UK authorities, but still failed to secure the green light from Beijing.
Founded in 2012 by entrepreneur Sky Xu, Shein has built a global presence, offering low-cost apparel such as US$5 dresses and US$10 jeans across approximately 150 countries. The business, headquartered in Singapore since 2022, maintains a significant reliance on its supply network in China, sourcing products from around 7,000 third-party suppliers. This operational structure has kept the firm within the ambit of Chinese offshore listing regulations, despite its overseas base.
Confidential IPO filings—commonplace in the United States—allow companies to engage regulators without immediate public scrutiny of financials or risk factors. Although rare in Hong Kong, the exchange’s rules do permit such filings for secondary listings or in specific spin-off scenarios upon regulatory waiver. Should Shein proceed under this framework, details of the offering will remain undisclosed until it clears a formal hearing with the Hong Kong exchange.
Final approval hinges on authorisation from the CSRC, though it remains unclear whether Shein has received an informal nod from the commission. According to sources, the confidential nature of the filing enables both Hong Kong and mainland Chinese regulators to conduct private evaluations and request clarifications before the materials are made available to institutional investors.
A successful IPO in Hong Kong would mark Shein’s third and potentially final bid to enter the public markets, and could become the city’s largest float this year. It would also represent a critical boost to Hong Kong’s capital markets, which recorded US$12.8 billion in IPOs and secondary listings in the first half of the year, amid turbulence driven by geopolitical and trade tensions.
Valued at US$66 billion during a 2023 pre-IPO fundraising round—down from earlier valuations—Shein’s public market debut will be closely watched. Analysts suggest the eventual valuation will reflect recent shifts in global trade policy, particularly US tariff increases on Chinese goods and the end of duty-free ecommerce imports, developments that have negatively impacted Shein’s largest market.
The company has also faced reputational challenges related to its supply chain. Allegations of forced labour involving Uyghur minorities in China’s Xinjiang region have led to increased scrutiny. While Beijing denies any human rights abuses, the US has imposed a ban on products linked to forced labour in the region. Shein maintains that its global supplier code of conduct prohibits forced labour and asserts that it does not permit Chinese cotton to be used in products destined for the US market.
Under current rules, Shein will be required to file with the CSRC within three business days of submitting its Hong Kong application. The regulator applies a “substance over form” principle, allowing significant discretion in determining whether companies fall under its purview—even if formally headquartered abroad.
If granted regulatory clearance, Shein’s confidential listing could set a precedent for future high-profile IPOs in Hong Kong, marking a turning point for both the company and the broader fundraising environment in Asia.
-Reuters
