Shein Shares Fall Over 5% on Second Day of Hong Kong Trading

Shares of online fast-fashion giant Shein fell more than 5% on Wednesday, their second day of trading in Hong Kong, signaling persistent investor concern following the company's highly anticipated initial public offering. The stock closed at HK$46, well below its issuance price of HK$48.56, while the city's broader Hang Seng Index finished the day flat.

A Volatile Debut

The slide on Wednesday extended a volatile start for the retailer. On its first day of trading Tuesday, Shein's stock tumbled as much as 10% before recovering to close near its IPO price.

According to a source and analysts cited by Reuters, that late-session rebound was the result of stabilisation measures. These are actions underwriters can take in large listings to support a stock's price and prevent sharp declines immediately following a debut.

Headwinds Weigh on Investor Sentiment

Ad

Analysts suggest the weak performance reflects a reassessment of Shein's growth prospects amid a challenging operating environment. The company raised $1.7 billion in its IPO, which valued the firm at $26.5 billion—a significant drop from a peak valuation of nearly $100 billion in 2022.

In a statement to Reuters, Brandon Ho, head of investment advisory for Singapore at Arta Finance, noted that Shein's "growth story that has become harder to underwrite." Key concerns for investors include:

• Slowing revenue growth and pressure on profit margins.
• The impact of higher import duties and customs costs in key markets like the U.S. and European Union.
• Growing regulatory risks and intensified competition from rivals.

These factors, Ho added, are "weakening the economics of its low-cost cross-border model."