Shein files for Hong Kong IPO as London listing prospects wane
Shein has filed for an initial public offering in Hong Kong as the prospects for the firm’s London listing continue to wane.
The Singapore-based business last week confidentially filed a draft prospectus for the Hong Kong Exchange and sought approval from the China Securities Regulatory Commission (CSRC), according to the Financial Times.
The fast-fashion firm had already filed for a London IPO over a year ago, but has so far been unable to clear regulatory hurdles.
A key stumbling block lies in the wording of the risk disclosure section of the prospectus, with differences between UK and Chinese regulators as to how to describe supply chain risks, in particular Xinjiang region, where China has been accused of human rights abuses.
Shein is still understood to view London as its preferred destination for an IPO, and it’s thought the Hong Kong filing is a move to pressure UK regulators into clearing its London listing before it heads elsewhere.
The Hong Kong exchange is likely to take a more favourable approach to Chinese companies’ description of political risks compared to London, while the Chinese government has also encouraged firms to opt for domestic floats over picking London or New York.
Before filing for IPO in London and Hong Kong, Shein had hoped to complete a flotation in New York in 2023 but was rebuffed by the US Securities and Exchange Commission.
Shein sales soar
Shein’s global turnover jumped as much as 19 per cent last year to $38bn, but profits slid 40 per cent to $1bn.
Shein has already become one of the biggest online fashion retailers in the UK, with sales of £1.6bn in 2023, a near-doubling compared to the previous year.
But the company’s business and employment practices have also come under scrutiny in the UK. Liam Byrne, a Labour MP and head of parliament’s business and trade committee, said the UK should introduce new legislation to increase scrutiny of supply chains that may include products made in the Xinjiang region of north-western China.
Alicia Kearns, the Conservative chair of the Commons foreign affairs committee, said: “With Shein’s prices so low the London Stock Exchange needs to ask itself, whose suffering is subsiding those prices?”
“A company which has failed to make full disclosures about its supply chains as required by UK law, and where there are grave concerns about its factory working conditions has no place in London.”