Source: Sharecast
According to the Financial Times on Tuesday, the fast fashion online giant has confidentially filed a draft prospectus with Hong Kong Exchange (HKEX) and filed for approval from the China Securities Regulatory Commission (CSRC).
The move comes 18 months after Shein filed for a London IPO, with the Singapore-based company failing to get the green light from UK regulators due to political backlash and supply chain concerns.
According to the FT, the UK's Financial Conduct Authority and the CSRC have been unable to agree on the risk disclosure part of the prospectus, specifically relating to Shein's supply chain in Xinjiang – the centre of alleged human rights abuses by China against the indigenous Uyghur people.
The FT's sources say that Shein's application for a Hong Kong IPO is partly a way to pressure the FCA into compromising to approve the controversial London listing, with the UK regulator keen to green light more flotations since IPO fundraising levels have dropped to a 30-year low.
Shein's last funding round valued the retailer at $66bn, though a near-40% plunge in profits last year might mean that recent valuation may be hard to achieve.
“Shein is still keeping its IPO dream alive. The Chinese retailer failed to get a US listing off the ground so its attention turned to the UK where progress has been incredibly slow. Now it seems to be trying a different tactic where it plays one exchange off against another," said AJ Bell investment analyst Dan Coatsworth.
"Chinese regulatory requirements are different to the UK, so Shein might simply be trying its luck in thinking the FCA would accept a Chinese-approved prospectus and bend the rules because it’s presenting a ready-made IPO on a silver platter."
Coatsworth said that, while UK regulators are "desperate" for big-name companies to join the London market, a Shein IPO seems unlikely given the high transparency, ethics and governance standards that are required.