Shein growth slowdown challenges investors before HK listing

Before its upcoming IPO in Hong Kong, Shein is facing significant challenges, as indicators show a slowdown in sales growth and rising costs. This has raised investor doubts about the justification for the targeted valuation, which has been cut to around $30-40 billion, down from nearly $100 billion in 2022. Investors confirm that growth has become less sustainable due to fierce competition and cost pressures, especially with changes in customs regulations and increased marketing expenditure, which diminish the appeal of the company's high growth rates. Morgan Stanley estimates Shein's fair value to be between $39 billion and $52 billion based on earnings multiples. Meanwhile, investors are focused on whether the company can convince the market that the slowdown is temporary and not a structural shift, as ongoing cost pressures and market changes continue to challenge the company's ability to achieve high valuations.

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