SHEIN lists on the HKEX: Market cap of HK$200 billion, potentially undervalued

The listing bell rings at the Hong Kong Stock Exchange.

Today (September 1), global online fashion giant Shein $SHEIN-W (00625.HK)$ officially listed on the Hong Kong stock exchange. The IPO offer price for Shein was HK$48.56 per share, with a market capitalization exceeding HK$200 billion, making it the largest fashion brand IPO on the Hong Kong stock exchange this year.

Based on the offering price, net proceeds from the global offering amount to approximately HK$13.214 billion. The cornerstone investor lineup is impressive, comprising seven top-tier institutions: Boyu Capital, Tiger Global, General Atlantic, Huang River (under Tencent), Jinglin Asset Management, Taikang Life Insurance, and UBS AM Singapore, with subscription demand remaining robust.

Founded in 2012, SHEIN leverages China’s robust supply chain and its “Large-scale Automated Test and Reorder” (LATR) operational model to sell products worldwide. In 2025, SHEIN served approximately 273 million active customers across around 160 markets. Although SHEIN has rarely appeared in the domestic public spotlight, it is a well-known fashion brand overseas.

This serves as a prime example of the globalization of Chinese enterprises.

The largest fashion IPO of the year debuts on the Hong Kong stock market

Shein was officially established in 2012. In 2014, the team decided to pilot the LATR ('Large-scale Automated Test and Reorder') model. Since then, leveraging a powerful end-to-end intelligent supply chain and an agile global fulfillment network to offer a diverse, frequently updated, and highly cost-effective product range, Shein began its rise.

How formidable is Shein? In terms of annual active customers, it surpassed 10 million in 2018. By 2020, despite having no physical stores, Shein pulled ahead decisively, gaining global popularity and exceeding 50 million active customers that year. In 2021, it broke the 100 million mark, and by 2024, it exceeded 200 million. As of today, based on 2025 retail sales, Shein is the world's largest online fashion destination and one of the top five global apparel and footwear companies.

Such momentum has made Shein one of the most watched super unicorns in the global venture capital circle in recent years. The prospectus disclosed that Shein secured USD 5 million in Series A financing in early 2015. Since then, its investor base has continued to expand, completing multiple funding rounds prior to the listing.

It boasts a roster of top-tier institutions, including renowned VC/PE firms such as IDG Capital, JAFCO Asia, Greenwoods Investment, Sequoia China, Tiger Global, and Shunwei Capital.

If primary market financing in the past witnessed Shein's growth speed, then the assembly of this prestigious cornerstone investor group represents a collective bet by global long-term capital.

For this IPO, Shein introduced seven cornerstone investors: Boyu Capital, Tiger Global, General Atlantic, Huang River (a Tencent affiliate), Greenwoods Asset Management, Taikang Life Insurance, and UBS AM Singapore. These investors span private equity, hedge funds, growth investors, internet enterprises, and insurance capital, with a total subscription amount not exceeding USD 383 million. The participation of top-tier institutions serves as a significant market bellwether.

The listing is merely a milestone. Shein is now entering a new phase:

According to the prospectus, approximately 40% of the net proceeds will be invested in technological capabilities, including cloud and server procurement, upgrading technical infrastructure, and developing cloud-based software for suppliers, demand forecasting, and warehouse automation. The company also plans to recruit approximately 1,500 to 2,000 full-time technical staff globally over the next 36 months;

Approximately 40% will be used to enhance brand awareness and strengthen global presence; about 10% will be allocated to corporate responsibility initiatives such as supply chain governance and decarbonization, with the remainder reserved for general corporate purposes.

Judging by the use of proceeds, this undoubtedly breaks external stereotypes: Shein is no longer a traditional cross-border e-commerce player, but an international fashion giant that has grown and transformed through technology. This has been the underlying foundation of its globalization over the years.

How Shein Rose to Prominence

To some extent, Shein has pioneered new paths in the global fashion industry.

The history of the fashion industry spans thousands of years and has always been central to human experience across generations. It is also one of the largest categories in consumer retail. According to data from Frost & Sullivan, the global fashion industry is expected to reach USD 1.7 trillion in 2025 and grow to USD 2.0 trillion by 2030. Regardless of changing times, the pursuit of beauty remains rooted in human nature.

The moat supporting Shein's business can be analyzed in three layers.

First is Shein's proprietary operating model, 'Large-scale Automated Test and Reorder' (LATR). This model aims to resolve the long-standing 'trilemma' in the apparel industry: the more styles offered, the higher the inventory risk; the faster new arrivals are launched, the stricter the supply chain requirements become; and reducing inventory often means sacrificing variety.

For traditional retailers, simultaneously achieving large-scale product selection, rapid design updates, and efficient inventory management is often difficult. SHEIN’s solution is not to rely on large-scale forecasts of consumer purchases, but rather to launch small batches of approximately 100 to 200 units into the market first. Demand is then assessed based on actual sales and consumer feedback, with best-sellers restocked rapidly—a process that can be completed in as little as five days.

Through LATR, SHEIN can economically and quickly adapt to shifting consumer preferences at scale. As of March 31, 2026, SHEIN offered over 2 million clothing styles, placing its product assortment among the industry leaders.

The realization of the 'small batch, quick reorder' model relies on a highly digitized supply chain network. By 2025, SHEIN had contracted with over 7,500 manufacturers, the vast majority of which are small and medium-sized enterprises (SMEs). SHEIN integrates these partners into its supply chain system via digital platforms, dynamically allocating orders based on specialized capabilities, pricing, and production capacity. Additionally, it provides factories with free software tools covering order acceptance, production, quality control, and shipping.

Within SHEIN’s ecosystem, factories operate as nodes in a digital system: SHEIN transmits demand signals, order allocations, and production management capabilities, while suppliers leverage this information to reduce inventory and capital tie-up, thereby improving capacity utilization.

Behind these nodes lies a larger system. From trend identification, merchandise planning, and design development to order allocation, production optimization, consumer feedback, and logistics fulfillment, these components form an 'end-to-end intelligent supply chain.' This system digitizes and integrates key supply chain links, enabling dynamic restocking and resource allocation based on forecasts and real-time demand signals.

Currently, SHEIN’s business footprint extends to major global consumer markets, including North and South America, Europe, the Middle East, Africa, South and Southeast Asia, and Oceania. As of June 30, 2026, SHEIN maintained a global warehouse network with approximately 6 million square meters of warehouse space across Asia, North America, Europe, the Middle East, and South America.

This core competitiveness has underpinned impressive financial performance: according to the prospectus, SHEIN achieved net revenue of $41.8 billion and net profit of $2.06 billion in 2025. The compound annual growth rate (CAGR) for net revenue from 2023 to 2025 was 14.2%, with sustained profitability demonstrating business resilience. By the end of 2025, the company’s total cash resources reached $14.786 billion, reflecting strong cash generation capabilities.

Looking ahead, a more ambitious narrative emerges: evolving from operating its own brand to empowering brands across the entire industry, becoming the infrastructure of the fashion sector.

In 2021, SHEIN launched the SHEIN X program; in October 2025, this initiative was upgraded to the SHEIN Xcelerator program, opening its supply chain, manufacturing, fulfillment, and global sales capabilities to external designers and brands. For brands with creative talent but lacking supply chain resources, they no longer need to build production and global sales systems from scratch. Instead, they can leverage this ready-made infrastructure to accelerate the conversion of designs into merchandise and reach consumers worldwide.

The British fashion brand Missguided serves as a typical example. Previously, this once-prominent UK brand entered administration due to rising supply chain costs and weak consumer demand. After integrating into SHEIN’s empowerment ecosystem, the brand’s existing design and creative team continued to lead product positioning and style innovation, while fully leveraging SHEIN’s mature backend supply chain and fulfillment capabilities. This significantly improved operational efficiency and profitability, with the brand’s revenue exceeding $210 million in 2025.

Such cases are far from rare. Empowered by SHEIN, many brands have been revitalized. This symbiotic relationship has also become SHEIN's second growth curve: data shows that the operating profit margin of brands empowered by SHEIN is approximately twice that of the group's overall operating profit margin.

When a company's capabilities can "spill over" to empower others, it inevitably becomes an indispensable infrastructure within the industry.

China will eventually give rise to a cohort of global corporations.

It may be hard to imagine, but within a 50-kilometer radius in Panyu District, Guangzhou, thousands of fabric suppliers, printing plants, and manufacturing facilities are clustered together, covering every step required to produce a garment. From here, SHEIN's products are shipped to London, Paris, Los Angeles, and most other destinations around the world you can think of.

This is also the consistent path taken by many Chinese brands going global: solidify the supply chain in China first, then expand overseas to become world-class enterprises.

As we have seen in recent years, a wave of Chinese companies is rising abroad along similar trajectories: MINISO has transformed its Chinese small-commodity supply system into a budget-friendly retail network spanning the globe; Pop Mart, fueled by the popularity of LABUBU, has made Chinese designer toys highly sought after in shopping malls across Europe and the United States; DJI and Insta360 stand as benchmarks for Chinese smart imaging brands expanding overseas... From consumer goods to hard technology, Made-in-China products are spreading across the world.

Returning to SHEIN, the company similarly anchors its supply chain in China while conducting its online fashion business targeting global consumers.

In the current narrative, SHEIN's value is undoubtedly significantly undervalued. On one hand, fashion is a massive yet highly fragmented market. In 2025, the combined market share of the top five players in the global fashion industry was only 10.4%, and the top twenty accounted for just about 20.5%. Although SHEIN is already the largest online fashion destination globally, its penetration rate remains in the early stages relative to this trillion-dollar market, leaving ample room before hitting any ceiling.

A more direct comparison comes from efficiency metrics: SHEIN's inventory turnover days in 2025 were only 36 days, significantly outperforming peers in the global fashion industry. In horizontal comparisons with global fashion giants, Inditex (ZARA's parent company) had an inventory turnover of 71 days, Fast Retailing (Uniqlo's parent company) reached 114 days, and Adidas even hit 164 days.

From this perspective, traditional giants like Inditex and Fast Retailing have long validated the potential for hundred-billion-dollar valuations in the fashion sector. While SHEIN's current market capitalization is sufficient to place it among the top tier of Chinese consumer companies, there is still significant upside potential when viewed within the context of the global fashion industry.

In recent years, the model of Chinese enterprises participating in global competition has undergone profound changes, with Shein serving as a prime example. As noted by the Academy of International Trade and Economic Cooperation under the Ministry of Commerce: "In the past, Chinese manufacturing relied more on scale and cost advantages to participate in international division of labor. However, the new generation of outbound companies, represented by Shein, is leveraging digital technologies, flexible supply chains, global operational systems, and brand development to transition from simply 'selling products' to 'building brands, ecosystems, and capabilities.'"

The next wave of world-class Chinese enterprises is rapidly emerging.

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