On June 27, ultra-fast fashion giant SHEIN is reportedly preparing to submit a draft prospectus confidentially to the Hong Kong Stock Exchange for an upcoming initial public offering (IPO), according to sources cited by Reuters. This marks the company’s third attempt at going public after its previous IPO plans in the United States and the United Kingdom fell through due to regulatory obstacles from Chinese authorities.
Sources say the company could file as early as this week, with a deadline set for early next week. If approved, the listing could become the largest IPO in Hong Kong for 2025, signaling renewed momentum for the city’s capital markets.
A Rare Move: Confidential Filing in Hong Kong
Unlike standard IPO procedures in Hong Kong, where filings are made public, SHEIN’s approach involves a confidential filing, commonly used in the U.S. but rarely permitted in Hong Kong. If granted, it would mark an exceptional waiver of the exchange’s core listing rules.
While Hong Kong allows confidential filings for secondary listings by companies already listed overseas (such as on the NYSE or Nasdaq), new applicants like SHEIN must obtain special approval.
Chinese Regulatory Hurdles and Two Failed IPO Attempts
SHEIN initially filed for a U.S. IPO in late 2023 but failed to obtain clearance from the China Securities Regulatory Commission (CSRC). The company then pursued a London listing, which was reportedly approved by U.K. financial regulators, but ultimately also fell through due to Chinese regulatory resistance.
Chinese companies seeking offshore IPOs must file with the CSRC within three business days of submitting an application in Hong Kong. SHEIN’s Hong Kong IPO also hinges on securing CSRC approval, though it remains unclear whether a verbal green light has already been obtained.
While SHEIN relocated its headquarters from China to Singapore in 2022 and is not legally registered as a Chinese company, the majority of its manufacturing is still handled by a network of roughly 7,000 suppliers in mainland China. As such, regulators apply a “substance over form” approach, treating the company as subject to Chinese oversight.
Trade Barriers and Human Rights Scrutiny
SHEIN has become a go-to brand among Gen Z consumers by offering trend-driven designs at ultra-low prices. Today, the company ships to approximately 150 countries. However, escalating U.S.-China trade tensions have posed serious challenges, particularly the removal of duty-free treatment for cross-border e-commerce parcels and higher tariffs on Chinese goods, which have impacted SHEIN’s largest market: the United States.
The company has also come under scrutiny for alleged ties to forced labor in Xinjiang, China. In response, SHEIN has publicly stated that it prohibits the use of cotton sourced from China in products destined for the U.S. market and enforces a global supplier code of conduct banning forced labor.
Valuation and Risk Disclosure
According to Reuters, SHEIN was valued at $66 billion during a pre-IPO funding round in 2023. However, changes in market conditions and trade policies may lead to a lower valuation when the IPO is finalized.
The company’s draft prospectus is expected to outline key risks related to its global supply chain, regulatory exposure, and sustainability measures. These documents, however, will not be made public until SHEIN passes a listing hearing with the Hong Kong Stock Exchange.
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