Shein Plans Informal Investor Meetings for London IPO

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), as it awaits UK regulatory approval.

The China-founded online retailer plans to conduct informal roadshows primarily across Europe, allowing an IPO-bound company to address large investors’ inquiries and gauge their investment interest.

Sources requested anonymity as they were not authorized to speak to the media. A Shein spokesperson declined to comment.

Shein confidentially filed paperwork with Britain’s markets regulator in early June, initiating the potential for a London listing later this year. The company is valued at $66 billion, a figure reached during a fundraising round last year.

Initially considering a New York IPO, Shein shifted its focus to London after facing challenges from U.S. lawmakers. The company aims to launch its float in the current quarter, pending approval from the Financial Conduct Authority (FCA).

As Shein prepares for its market debut, it faces heightened scrutiny regarding its labor practices and environmental impact. Its capacity to persuade large institutional investors of its business viability and financial stability will be crucial to achieving its previous valuation.

This London listing plan signifies a pivot from a previously stalled U.S. IPO strategy, following advice from the China Securities Regulatory Commission (CSRC) earlier this year that did not favor a U.S. listing due to supply chain concerns.

The proposal for a London stock listing still requires CSRC approval, and it’s unclear whether the company has obtained any guidance from the regulator.

While Shein’s financial metrics are not publicly available, April estimates from Bernstein suggested its net profit soared to $2 billion last year, up from $700 million, with a profit margin of 4.4% of sales.

A Shein share offering could invigorate London’s lethargic IPO market, which has seen just nine new listings this year compared to 18 in 2023, falling behind other European nations.

The UK’s markets watchdog has expedited new rules this summer to attract companies to the London Stock Exchange, aiming to regain lost ground post-Brexit.

Nonetheless, Shein encounters resistance from various European governments, including Germany, Austria, Denmark, France, and the Netherlands, which recently urged EU authorities to enforce online platform standards and reconsider the exemption on parcels under 150 euros, a change that could impact Shein’s profitability.