Shein’s Hong Kong IPO Moves Ahead Despite Forced-Labor Criticism

Shein’s planned Hong Kong listing is still moving forward. The company is offering about 280 million Class B shares, its order book was reportedly fully covered, and trading is scheduled to begin on September 1. The deal has not been derailed by Republican Congressman John Moolenaar’s call for the three principal U.S. banks involved to withdraw. 12

The IPO at a glance

Shein’s global offering comprises 279,992,500 Class B shares, commonly rounded to 280 million, at HK$47.60–HK$49.50 per share. About 10% is allocated to Hong Kong investors and the remainder to international investors, subject to reallocation and an over-allotment option. 7

At the top of the range, the offering would raise HK$13.86 billion, or about $1.77 billion, and value Shein at close to $27 billion. That is roughly 70% below the nearly $100 billion valuation reached in a 2022 private fundraising round. 13

Reports later indicated that the deal was likely to price near the midpoint of the range, at about HK$48.56 per share, raising approximately $1.7 billion and implying a valuation of around $26.5 billion.

Goldman Sachs, Morgan Stanley and JPMorgan are the principal banks identified as joint sponsors and overall coordinators. Shein also expanded the underwriting group to include additional institutions, with total potential underwriting fees of up to HK$306 million, or about $39 million. 12

A fully covered order book means that investor indications of interest match or exceed the shares available. It does not guarantee that the stock will rise after listing, particularly when temporary price stabilization and over-allotment arrangements are available. 2

What Moolenaar is alleging

Moolenaar, chairman of the U.S. House Select Committee on China, has called on JPMorgan, Goldman Sachs and Morgan Stanley to stop supporting the offering. He argues that the banks would be helping a company whose supply chain has been linked by critics to alleged forced labor in China’s Xinjiang region.

The distinction matters: Moolenaar’s statement is an act of congressional advocacy, not a court ruling, regulatory finding or automatic prohibition on the banks’ participation. The available reporting does not indicate that the three lead banks withdrew from the transaction; they remained identified in the offering’s underwriting structure.

The criticism focuses partly on Shein’s Hong Kong prospectus. Reuters reported that the filing did not specifically identify risks tied to allegations that Shein products could contain cotton from Xinjiang, where U.S. officials and human-rights organizations have alleged state-sponsored forced-labor programs affecting Uyghurs and other minorities. The filing instead used more general language about reputational risk.

That omission has become a central investor-protection and human-rights issue. Supporters of fuller disclosure say investors should be able to assess the potential legal, commercial and reputational consequences of supply-chain exposure. Shein’s Hong Kong filing, however, moved forward without the specific Xinjiang language that had complicated earlier listing efforts. 13

Why Shein is listing in Hong Kong

The Hong Kong offering follows stalled or abandoned attempts to list in New York and London. Those efforts faced political scrutiny, regulatory obstacles and questions about supply-chain disclosures. 41518

China’s approval for the Hong Kong listing cleared a major barrier. The choice of venue also reflects Shein’s complicated corporate identity: it is headquartered in Singapore but was founded in China and remains heavily connected to Chinese manufacturing. Reuters described the Hong Kong debut as the result of Shein having to reconcile its international ambitions with its Chinese roots. 1824

Hong Kong therefore offers Shein a route to public markets after Western listings became difficult, but it does not remove the underlying scrutiny. The company will remain exposed to questions about labor standards, supply-chain traceability and the level of disclosure investors should expect.

Why the lower valuation matters

The proposed valuation is a sharp reset from Shein’s private-market peak. Reporting has linked the discount to slower growth expectations, higher operating and import costs, regulatory exposure and uncertainty over whether its ultra-low-price model can continue at the same scale. 110

The business model is also facing pressure in major markets. In the United States, changes affecting low-value imports have weakened the de minimis advantage that helped make direct-to-consumer shipments inexpensive. Shein has said the policy change hurt sales, while higher import costs threaten pricing and margins. 1922

For public-market investors, the question is not simply whether Shein can complete its listing. It is whether the company can sustain growth while absorbing customs changes, consumer-protection scrutiny, potential penalties and reputational damage.

The wider regulatory and sustainability risks

Shein disclosed that its U.S. operations are under investigation by the Federal Trade Commission and could face significant fines. The company also faces European regulatory cases, while earlier investigations and fines have kept environmental, social and governance concerns in focus. 171923

Those concerns extend beyond Xinjiang allegations. Critics have raised issues involving labor standards, textile waste, emissions, product safety, environmental claims and the short lifecycle associated with ultra-fast fashion. These risks can affect the company through legal costs, compliance spending, changes in consumer behavior and restrictions on how it operates. 17

The Hong Kong IPO is therefore progressing operationally, but the central investment story remains contested. Strong demand for the offering would show that investors are willing to fund Shein at a much lower valuation; it would not resolve the company’s disclosure, human-rights, regulatory or geopolitical challenges.