Shein has confidentially submitted plans for an initial public offering in Hong Kong as the fast-fashion giant looks to speed up its prolonged listing efforts and push UK regulators to approve a potential London debut, the Financial Times has reported.
The Singapore-headquartered company, originally founded in China, submitted a draft prospectus to the Hong Kong Stock Exchange last week, according to two people familiar with the matter cited by FT.
It has also sought clearance from the China Securities Regulatory Commission (CSRC), which has become increasingly strict about how companies describe the political and business risks of operating in China.
The move is seen by those close to the matter as a strategic attempt to pressure the UK’s Financial Conduct Authority (FCA) into accepting a compromise on disclosures related to Shein’s China-based supply chain, especially its ties to the contentious Xinjiang region.
Regulatory impasse over Xinjiang disclosure continues
Shein’s proposed London IPO has been held up for more than 18 months due to disagreements between UK and Chinese regulators over the language used in its risk disclosures.
The FCA had approved a version of the prospectus earlier this year, but it was rejected by the CSRC, particularly over how the company’s links to Xinjiang were described.
China has faced global scrutiny for alleged human rights abuses in Xinjiang, where Uyghur Muslims are reportedly subjected to forced labour.
Shein has denied sourcing cotton from the region, but questions persist.
In January, Liam Byrne, chair of the UK’s business and trade committee, raised concerns with the FCA about the transparency of Shein’s supply chain after a senior company official declined to confirm whether any of its products contained Xinjiang cotton.
Shein still considers London its preferred listing destination, thanks to the city’s global investor base.
But the gulf between regulatory expectations in London and Beijing remains wide.
A dual or secondary listing may still be on the table if the FCA eventually agrees to a CSRC-sanctioned prospectus.
Hong Kong a more accommodating option amid geopolitical headwinds
Beijing has recently encouraged companies looking to list overseas to favour Hong Kong over New York or London, particularly amid heightened scrutiny of Chinese businesses in Western markets.
According to the people familiar with Shein’s plans, HKEX is expected to show more flexibility in allowing Chinese companies to describe political risks in a way acceptable to Beijing.
Shein’s drawn-out IPO efforts have been hampered by geopolitical friction from the start.
Its earlier attempt to float in the US was blocked in 2023 after it failed to secure approval from the Securities and Exchange Commission.
Despite having about $12 billion in cash reserves and no immediate need to raise funds, Shein’s investors and advisers are keen to push forward.
Goldman Sachs, Morgan Stanley, and JPMorgan—leading banks on the IPO—are eager to complete the transaction after years of effort across three continents.
Shein’s financials under pressure
While Shein’s 2024 sales rose 19% to $38 billion, net profit fell nearly 40% to $1 billion, raising questions over its valuation.
The company had previously been valued at $66 billion in private markets, but the recent dip in profitability may temper investor expectations.
Still, sources say Shein’s profitability has improved recently, helped by the withdrawal of rival Temu from the US fast fashion market due to increased tariffs.
US sales, which make up around a third of Shein’s revenue, have been more resilient than anticipated despite the end of certain tariff exemptions.
HKEX, the FCA, and Shein declined to comment on the filing or the prospects of a dual listing.
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