QUOTES-Shein shares slide in long-awaited Hong Kong trading debut

Shares in online fast-fashion retailer Shein fell 8% in their first day of Hong Kong trade on Tuesday, with investors worried about the impact of setbacks ​that long delayed its listing and have undermined its competitive advantages.

Known globally for selling $5 tops and $10 dresses, Shein has ​been humbled by tariff and duty changes in the U.S. and Europe. Intense scrutiny ‌of ​its business practices in the West also hampered its attempts to list in New York and London, which were ultimately blocked by Chinese authorities. Here are comments from analysts on the debut:

JAMES OOI, MARKET STRATEGIST, TIGER BROKERS, SINGAPORE: "One of the clearest questions is whether growth is becoming more expensive to sustain. With marketing expenses rising faster than revenue in 2025, the focus is ‌increasingly on whether Shein can keep expanding its user base without customer acquisition becoming more costly.

"A more constructive part of the story is Shein's gradual shift from a pure retailer to a retailer-plus-platform. Service revenue has become a larger share of the mix as third-party brands sell through Shein. "Strategically, the shift could broaden Shein's assortment and let it monetise its infrastructure beyond its own inventory, though investors will also have to weigh the added compliance and reputational risks of hosting third-party merchants.

"Shein is also becoming less dependent on apparel, with categories such ‌as home and living playing a larger role. The bigger question is whether the company can extend its supply chain and customer acquisition capabilities into a broader lifestyle commerce platform, which could potentially lead to a material expansion of its addressable ‌market." JOSH GILBERT, LEAD ANALYST FOR ASIA-PACIFIC, ETORO, SYDNEY:

"Shein has spent a decade proving how many people will buy a $5 dress, but on day one in Hong Kong, it learned that shoppers and shareholders are buying two very different things. Shares fell as much as 10% despite only 6.6% of the company being floated, in a market that has delivered a string of successful debuts this year. Scarcity like that is supposed to flatter a listing, so falling anyway is a tell-tale sign. "Listing around 70% below the 2022 peak looks like a bargain only if the old price was sensible, and that number was set ⁠at the height of ​the pandemic e-commerce boom. Revenue growth has since slowed from 21% to ⁠8%, and first-quarter sales barely moved.

"A heavily discounted valuation is not the same thing as a cheap stock, and the market said as much by pricing Shein below H&M, the incumbent it was meant to be replacing. "The debut clearly hasn't been a roaring success, and keeping customers is the next challenge, because ⁠the thing customers love most is the thing getting hardest to protect.

"Daily active users in Europe have fallen around 45% since the EU scrapped its duty exemption on small parcels, and Temu has seen a similar drop. This is less a Shein problem, but more so the end ​of an era for cheap cross-border shipping. The brand's reach is unquestionable, but a large share of that loyalty has always belonged to the price tag." KENNY NG, STRATEGIST, CHINA EVERBRIGHT SECURITIES INTERNATIONAL, HONG KONG:

"Shares are under the IPO offering ⁠price. I believe this reflects how Shein has faced significant challenges in recent years, alongside a decline in its financial performance last year. Due to fluid international trade policies in recent years and the impact of geopolitical tensions on global consumer sentiment, some investors remain relatively cautious about its valuation." CHARU CHANANA, CHIEF INVESTMENT STRATEGIST, SAXO, SINGAPORE:

"I ⁠think ​the weak debut shows that even after the huge valuation reset, investors still don't see Shein as obviously cheap. At around 15x forward earnings, it came to market at more than twice PDD's multiple, so investors were being asked to pay a premium despite weaker growth visibility and significant regulatory and trade risks. "That is a difficult combination to justify. PDD offers exposure to a larger e-commerce platform with a stronger growth story, while Shein is facing higher tariffs, the loss of the U.S. de minimis advantage, intense ⁠competition from Temu and AliExpress, and continued regulatory scrutiny.

"The problem is that the economics of Shein's model have become tougher at the same time as growth has slowed. So the market is treating Shein less like a disruptive high-growth platform and increasingly ⁠like a retailer facing margin and execution pressures." CHRIS WESTON, HEAD OF RESEARCH, ⁠PEPPERSTONE GROUP LTD, MELBOURNE:

"The demand profile is interesting. Shein was 2.6 times oversubscribed by institutional investors and 5.6 times oversubscribed by retail investors. "Contrast that with CXMT and Unitree, and the exceptional demand to participate in those allocations, and there is a clear message about where investors currently want exposure across China and Hong Kong.

"The strongest appetite remains around AI, robotics and memory. These are the ‌areas where investors see structural growth, where demand ‌is concentrated and where China is making its biggest strategic push."