By Julie Zhu, Amy-Jo Crowley and Hadeel Al Sayegh
HONG KONG/LONDON (Reuters) – Shein is set to hold informal investor meetings in the coming weeks for its planned London initial public offering (IPO), three sources with knowledge of the matter said, pushing ahead with preparations as it awaits UK regulatory approval.
The China-founded online retailer plans to hold informal roadshows mainly across Europe, one of the sources said, during which an IPO-bound company fields large investors’ questions and tests their investment appetite.
The sources declined to be identified as they were not authorised to speak to the media.
A spokesperson for Singapore-headquartered Shein declined to comment.
Shein confidentially filed papers with Britain’s markets regulator in early June, kicking off the process for a potential London listing by the company later in the year, Reuters reported in June, citing sources.
The company, valued at $66 billion last year during a fundraising round, began considering a London IPO earlier this year after its initial New York plan came unstuck following opposition from U.S. lawmakers.
Shein is working towards launching the float in the current quarter, subject to it getting the approval from Britain’s markets watchdog, the Financial Conduct Authority (FCA), a separate source familiar with the matter said.
As Shein, known for its $5 tops and $10 dresses, moves towards its market debut, its treatment of workers and environmental record has come under increased scrutiny.
The fast-growing company’s ability to convince large global institutional investors of the soundness of its business case and financial health will determine whether it is able to match the $66 billion valuation it achieved last year.
Shein’s preparations for a potential London listing marks a shift from its long-running U.S. IPO plan, which has run into obstacles at home and abroad, Reuters has reported.
The group confidentially filed for an IPO with the U.S. Securities and Exchange Commission in November and concurrently sought approval from the Chinese securities regulator, sources have said.
However, the China Securities Regulatory Commission (CSRC) informed Shein earlier this year that it would not recommend a U.S. IPO due to the company’s supply chain issues, Reuters has reported.
Shein’s London stock listing plan still requires CSRC approval, and it remains unclear whether the company has received any guidance from the Chinese regulator.
As of Thursday, a review of the CSRC website, which publishes approved offshore IPO candidates, did not mention Shein.
Shein’s financial figures are not publicly available, but analysts at Bernstein in April estimated its net profit more than doubled last year to $2 billion from $700 million, giving it a profit margin of 4.4% of sales.
The Shein share offering would be a boost for London’s moribund IPO market.
The UK has had just nine new listings this year versus 18 in 2023, according to Dealogic data. It lags other European countries, and ranks 10th among venues for listings in Europe, the Middle East and Africa in terms of IPO value.
Britain’s markets watchdog this summer fast-tracked a raft of new rules to facilitate and encourage companies listing on the London Stock Exchange as it sought to catch up with New York and the European Union after Brexit.
Shein is facing pushback from several governments in Europe, with Germany, Austria, Denmark, France and the Netherlands writing a joint letter last week calling on European Union authorities to enforce the bloc’s standards on online platforms and expressing their support for scrapping the duty exemption on parcels worth less than 150 euros.
The removal of such “de minimis” tax breaks could hurt Shein’s profitability, investors have said.
(Reporting by Julie Zhu in Hong Kong, Amy-Jo Crowley in London and Hadeel Al Sayegh in Dubai; additional reporting by Helen Reid in London; Editing by Anousha Sakoui, Jacqueline Wong and David Evans)
