According to the documents submitted by SHEIN to the Hong Kong Stock Exchange in July, the company’s net revenue growth rate in the first quarter of 2026 was only 1.1%, with a net loss of $99 million, a significant turnaround from the $395 million net profit in the same period of 2025.
SHEIN’s net revenue growth rate has declined sharply from 41.1% in 2023, 20.7% in 2024, to 8% in 2025 (total revenue of $41.8 billion). By the first quarter of 2026, the revenue growth rate was only 1.1%. The financial report for the first quarter of 2026 also included a $328 million book loss due to changes in the fair value of convertible shares.
Since May 2025, the United States has cancelled the tax-free policy for small parcels and imposed tariffs, causing SHEIN to pass on some costs to consumers. This resulted in a decline of over 3% in the company’s US revenue in 2025, and a significant drop of 14% in the first quarter of 2026 compared to the same period last year. The company also warned in the documents that this impact could spread to its largest market in Europe, which accounts for 35% of its revenue.
According to reports from Reuters citing sources familiar with the matter, due to slowing growth and regulatory pressures in various countries, SHEIN’s latest valuation target has been further reduced despite planning to launch its initial public offering (IPO) in Hong Kong later this week.
Sources revealed that SHEIN’s valuation target in this Hong Kong IPO is around $25 to $28 billion, lower than the target of $30 to $40 billion the management had been pursuing earlier this month during meetings with investors.
Compared to the valuation of $98.2 billion given by investors during the financing round in 2022, SHEIN’s current valuation has shrunk by about 75%. Based on its 2025 net profit of $2.06 billion, a $25 billion market value corresponds to a price-to-earnings ratio of around 12.
SHEIN plans to issue up to 8% of its total shares in the IPO, with fundraising reaching up to $20 billion. Sources and the prospectus noted that if the final pricing is lower than the agreed threshold, the company will be required to issue additional shares to specific early investors before listing.
With various countries cracking down on cross-border cheap e-commerce platforms and strong competition from rivals like Temu under Pinduoduo, the market is skeptical about whether SHEIN can return to high growth trajectory.
Experts told Bloomberg that institutional investors on the Hong Kong Stock Exchange will reevaluate SHEIN for pricing, no longer considering it as a “high-speed growing tech platform,” but rather as a “physical retail and logistics operator operating in a heavily obstructed trade environment.”