Shein seeks to raise $1.8b in Hong Kong IPO

Online fashion retailer Shein launched its Hong Kong initial public offering on Monday, seeking to raise as much as HK$13.9 billion ($1.8 billion), with most of the proceeds earmarked for technology investment, brand building and international expansion.

Shein Global Holdings Ltd is offering about 280 million Class B shares at between HK$47.60 and HK$49.50 each. The Hong Kong public offering comprises about 28 million shares, or 10 percent of the total, while the remaining 90 percent will be offered internationally, subject to reallocation. The company's prospectus shows the offering would value Shein at up to $27 billion at the top of the price range.

Assuming an offer price of HK$48.55, the midpoint of the proposed range, and that the over-allotment option is not exercised, Shein expects to receive net proceeds of about HK$13.1 billion after underwriting commissions and other expenses.

According to its prospectus, about 40 percent, or HK$5.25 billion, will be used to strengthen the company's technology capabilities. Planned investments include customer interfaces, cloud-based software for suppliers, demand forecasting, warehouse automation and artificial intelligence-powered inventory management.

Another 40 percent will go toward raising brand awareness and expanding Shein's global presence, including marketing campaigns and customer acquisition. About 10 percent will support corporate responsibility initiatives, while the remainder will be used for general corporate purposes.

Seven cornerstone investors — Boyu, Tiger Global, General Atlantic, Tencent, Greenwoods, Taikang Life and UBS Asset Management Singapore — have agreed to invest up to $383 million. At the midpoint price, they would subscribe for about 61.9 million shares, or 22.1 percent of the initial offering. 

The Hong Kong public offering is scheduled to close at noon on Thursday. The final offer price and allocation results are expected to be announced on Aug 31, with trading set to begin on Sept 1 under the stock code 00625.