SHEIN IPO: The Biggest IPO in 2024 in London?

• Although Shein has yet to formally announce the listing destination, there is a growing anticipation that the listing venue could be London, rather than New York.

• It has been reported that the company has more than doubled its net profit to more than US$2 billion in 2023.

• The company is currently seeking a corporate value of nearly US$70 billion to US$90 billion in the Shein IPO which would be one of the biggest IPOs globally in 2024.

Shein is getting ready to complete its IPO in the next several months. Although the company has yet to formally announce the listing destination, there is a growing anticipation that the listing venue could be London, rather than New York. Shein is one of the most popular and profitable fast fashion retailers founded in China.

One of the major reasons why Shein has been considering on listing on the London Stock Exchange is due to the US Securities and Exchange Commission (SEC) which may not approve the Shein IPO in the United States.

On 15 February 2024, the US Republican Senator Marc Rubio sent a letter to the US SEC, asking it to block the Shein IPO. Rubio's letter included the following vicious statement, "Shein’s collaboration with Chinese regulators raises serious doubts that its IPO filings are complete and accurate. As I have written to you in the past, those very regulators order Chinese companies to deceive US authorities and investors about the risks of doing business in the People’s Republic of China.”

One of the specific issues that the US regulators have pointed out is a potential supply chain ethics violation with regards to Shein’s alleged use of cotton produced in the Xinjiang region. The US State Department has also alleged that human rights abuses are committed against the Uyghur people in the Xinjiang region and has prohibited the importation of goods made there.

If Shein is able to complete its IPO on the London Stock Exchange, this would mean that the UK regulators are willing to "look the other way" in issues such as cotton produced in the Xinjiang regi9on and the alleged human rights abuses against the Uyghur people in the Xinjiang region.

Valuations

Shein was last valued at US$66 billion in a private market funding round. The company reached its peak valuation at US$100 billion in April 2022, up from a valuation of nearly $15 billion in 2020. Its private market valuation dropped to US$60 billion in May 2023.

The company is currently seeking a corporate value of nearly US$70 billion to US$90 billion in the Shein IPO. If Shein is able to complete its IPO (either in London or New York), it is likely to be one of the biggest IPOs globally in 2024.