SHEIN clears listing hearing; largest cross-border e-commerce IPO on Hong Kong’s market in 2026 is imminent

■ Net profit last year was USD 2.064 billion

■ Total orders last year exceeded 1 billion

■ The proceeds from this offering will primarily be used to enhance the company's technological capabilities

Author | Zheng Yijia

Edited by Chen Qiu

Lingjing ID: DMS-012

According to information disclosed on HKEXnews, on July 26, SHEIN International Holdings Limited (hereinafter referred to as “SHEIN”) published its post-hearing information memorandum and passed the Hong Kong Stock Exchange’s listing hearing. As of January 1, 2026, SHEIN was valued at approximately RMB 456 billion. If SHEIN successfully lists this time, it is expected to become the largest cross-border e-commerce IPO on the Hong Kong stock exchange in 2026.

According to the prospectus, SHEIN was originally founded in 2012 as a global online fashion and lifestyle company, serving approximately 273 million active customers across around 160 markets in 2025.

SHEIN employs a dual-class share structure, with each Class A share carrying 10 voting rights and each Class B share carrying one voting right. Currently, the four founders—Chris Xu, Miao Miao, Gu Xiaoqing, and Ren Xiaoqing—collectively hold 65% of the company’s shares. The founders beneficially own all issued Class A shares, while investors include well-known institutions such as IDG Capital, Shunwei Capital, and Sequoia China. During its Series D round, SHEIN had a pre-money valuation of approximately USD 98.2 billion, which declined to USD 64 billion by the Series D+ round.

Unlike traditional retailers, SHEIN primarily operates under the LATR model—Large-scale Automated, Small-batch, Rapid Turnaround—which enables scalable, proprietary, small-volume, demand-driven production, while simultaneously achieving extensive product selection, rapid design refreshes, and efficient inventory management.

In 2025, SHEIN’s inventory turnover days were only 36. As of March 31, 2026, SHEIN offered over 2 million clothing SKUs. From 2023 to 2025, the average annual purchase frequency per customer remained relatively stable at approximately 3.8, 4.0, and 4.0 times, respectively.

From 2023 to 2025, SHEIN reported net revenues of USD 32.103 billion, USD 38.748 billion, and USD 41.847 billion, with year-over-year growth rates of 41.1%, 20.7%, and 8.0%, respectively, indicating a continued slowdown; net profits were USD 2.789 billion, USD 3.365 billion, and USD 2.064 billion, with net profit margins of 8.7%, 8.7%, and 4.9%, respectively.

In the first quarter of 2026, SHEIN reported net revenue of USD 9.052 billion, a marginal year-over-year increase of 1.12%; however, due to a USD 3.28 billion loss from the fair value change of convertible redeemable preferred shares, the company recorded a net loss of approximately USD 990 million.

Currently, SHEIN’s largest cost component is fulfillment expenses, which include salaries for fulfillment staff, warehouse rental costs, shipping and handling fees, and packaging costs. These expenses rose from USD 13.501 billion in 2023 to USD 19.072 billion in 2025, increasing their share of total costs from 42.1% in 2023 to 45.6% in 2025.

The primary reason for the increase in fulfillment costs is the growing share of the marketplace model in the company's overall business. In 2025, SHEIN's total order volume rose from 715 million in 2023 to 1.078 billion, while fulfillment cost per order decreased from USD 18.9 in 2023 to USD 17.7.

By region, Europe and the United States are SHEIN's largest markets, generating net revenues of USD 14.802 billion and USD 10.101 billion in 2025, accounting for 35.4% and 24.1% of total net revenue, respectively. As a result, changes in international trade policies will impact the company's operations; for example, due to prior U.S. trade policy changes, SHEIN's net revenue from the U.S. market has been negatively affected since May 2025.

According to the prospectus, SHEIN intends to use the proceeds from this offering primarily to enhance its technological capabilities, including further strengthening and upgrading its technology infrastructure, procuring cloud and server services, and deploying AI-driven models and tools, as well as investing in the application of artificial intelligence and data analytics across its entire operational system. Additionally, SHEIN plans to allocate funds toward increasing brand awareness and reinforcing its global footprint, including greater investment in brand marketing initiatives.

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