LONDON/HONG KONG: Fast-fashion retailer Shein is targeting a valuation of between US$30 billion and $40 billion in its planned Hong Kong initial public offering, which could launch as early as mid-August, according to three people familiar with the matter.

The valuation target and timing, which have not previously been reported, are not final and could change following investor feedback from meetings that began last week, the sources said. They declined to be identified because the plans are confidential.

The target represents a sharp reduction from Shein's previous private valuations, which reached $98.2 billion in 2022, then fell to $64 billion in 2023 and again in April 2024 as growth slowed and external pressures increased.

One source said Shein is prioritizing a valuation that can support its share price after listing rather than seeking the highest possible valuation. Some potential cornerstone investors are pushing for a valuation closer to $30 billion to $32 billion, the source added. Shein has held investor meetings in New York, Boston and San Francisco over the past week.

Singapore-headquartered Shein, founded in China in 2012, did not immediately respond to a request for comment. The company has not publicly disclosed the size, offer price or timetable for its Hong Kong listing.

Shein's draft IPO prospectus last month showed it swung to a quarterly loss of $99 million as sales slowed after the United States removed an import duty exemption on small packages and the company recorded a $328 million fair-value charge on convertible redeemable preferred shares following an accounting change.

"The valuation cut mainly reflects two concerns: first, Shein's profits declined last year; second, its e-commerce model is closely tied to small-parcel tariffs," said Kenny Ng, a securities strategist at Everbright Securities International.

Shein has also faced slowing revenue growth, weaker earnings and pressure on margins amid rising trade costs, tighter regulatory scrutiny and intensifying competition in global e-commerce.

Shein received approval from China's securities regulator on July 10 for its Hong Kong IPO after unsuccessful listing attempts in New York and London.

According to its draft prospectus, the company plans to use the IPO proceeds to invest in technology, expand its global brand, support corporate responsibility initiatives, and for general corporate purposes.