Shein to file confidentially for Hong Kong IPO amid global expansion plans

China-founded fast-fashion retailer Shein plans to file a draft prospectus confidentially for its Hong Kong listing, marking a rare departure from the usual practice of companies making public filings of IPO documents, three sources with knowledge of the matter said.

One of the sources said Shein aims to submit the filing confidentially as soon as this week. A second source said Shein expects to make the filing by Monday.

Shein’s confidential filing, if approved, would represent a waiver of one of the main listing rules by the Hong Kong exchange for one of the world’s most closely watched IPO candidates, and possibly the largest in the city this year, two of the sources said.

The filing will come as the company, which sells low-priced apparel such as $5 dresses and $10 jeans in around 150 countries, makes its third attempt to go public, more than 18 months after it first filed for a U.S. IPO in late 2023.

Confidential filings enable companies to keep vital operational and financial information under wraps for longer, allowing them to go through the regulatory review process without public disclosure.

Hong Kong’s listing rules permit confidential filings for secondary listings by companies already listed on recognized overseas exchanges, such as the New York Stock Exchange or Nasdaq.

The listing rules show that the exchange could also waive or modify the publication requirements in a spinoff from an overseas-listed parent upon application by a new applicant.

While this practice is common for U.S. IPO applicants, it remains relatively rare in Hong Kong, where high-profile IPOs have included Chinese tech giants Xiaomi and Meituan, which both filed publicly for their floats.

The sources spoke to Reuters on the condition of anonymity as they were not authorized to speak to the media.

Shein, founded by China-born entrepreneur Sky Xu, did not reply to a request for comment. The Hong Kong stock exchange declined to comment on individual companies.

Documents, including financials, related to Shein’s IPO will remain undisclosed until the company passes a hearing with the Hong Kong stock exchange, which is the final step in the city’s regulatory approval process.

Before that final step, Shein must secure approval from the China Securities Regulatory Commission (CSRC) to proceed with the Hong Kong IPO. It is not known if Shein has already secured a verbal nod from the Chinese securities regulator.

The CSRC did not respond to Reuters’ request for comment.
Reuters first reported last month, citing sources, that Shein was working toward a listing in Hong Kong after its proposed London IPO failed to secure the green light from Chinese regulators.

Reuters previously reported that the New York attempt also did not receive CSRC approval.

Regulatory approval

Shein’s confidential filing enables regulators in Hong Kong and mainland China to review the IPO application, submit questions to the company, and conduct the approval process privately, the sources said.

The regulators would be able to complete this process before the public — including potential institutional investors — can scrutinize the application materials and risk factors, they added.

The filing would come against the backdrop of Shein grappling with the knock-on impacts of the Sino-U.S. trade war after U.S. President Donald Trump ended duty-free treatment of e-commerce parcels and hiked tariffs on Chinese goods, hurting its business in the U.S., its biggest market.

Shein was valued at $66 billion during its pre-IPO fundraising round in 2023, down by a third from a funding round one year earlier. Its eventual IPO valuation will hinge on the impact of the tariff changes, sources have said.

Risk disclosures

A Shein listing would help Hong Kong, which saw $12.8 billion worth of IPOs and second listings in the first half, reestablish its credibility as a global fundraising center at a time of major volatility stoked by U.S. trade policy changes.

Shein, founded in mainland China in 2012, is hoping to succeed in Hong Kong after failed attempts to list in New York and then London, where Britain’s financial regulator approved the listing.

In line with Beijing’s rules for Chinese firms pursuing offshore listings, Shein must file with the CSRC within three working days of submitting its IPO application in Hong Kong.

Shein relocated its headquarters from China to Singapore in 2022 and does not directly own or operate any factories. However, it remains subject to Chinese IPO regulations because most of its products are manufactured by a network of 7,000 third-party suppliers based in China, according to sources.

The CSRC applies the rules on a “substance over form” basis, granting it discretion on when and how to implement them. A draft prospectus would normally disclose key risks to a company, including those linked to its supply chain.

Shein has faced allegations from politicians and campaigners that its supply chain in China is linked to forced labor of Uyghur minorities in Xinjiang, a highly contentious issue for Beijing, which denies any abuses in the cotton-producing province.

The U.S. bans imports of products made with forced labor from Xinjiang, and Shein has stated that it prohibits its suppliers from using Chinese cotton in products bound for the U.S.

Shein has said its supplier code of conduct prohibiting forced labor applies worldwide.