HONG KONG – Shares of Shein slipped more than 3 per cent on Sept 2, a day after a lacklustre debut session following a long-awaited initial public offering.
The online fast-fashion retailer’s stock tanked by as much as 10 per cent on Sept 1 but recovered to close to its HK$48.56 issuance price.
The stock was trading at HK$46.94 in early trade on Sept 2.
Hong Kong’s Hang Seng Index was down about 0.9 per cent.
Shein’s share price rallied late on Sept 1 and its rebound was the result of so-called stabilisation measures which can be applied to large listings to avoid sharp declines on a debut day, according to a source and analysts.
Shein raised US$1.7 billion in its IPO which valued the firm at US$26.5 billion, nearly a quarter of its peak of nearly US$100 billion in 2022.
Higher import duties in key markets, growing regulatory risks and intensified competition from rivals are hampering Shein’s growth prospects, investors and analysts said.
“Shein’s weak performance reflects investors reassessing a growth story that has become harder to underwrite,” said Brandon Ho, head of investment advisory for Singapore at Arta Finance.
“Revenue growth has slowed over the past few years and margins are under pressure, while higher tariffs and customs costs in the US and EU are weakening the economics of its low-cost cross-border model. REUTERS
