Shein Targets $1.8 Billion in Hong Kong Despite Xinjiang Controversies

Shein's IPO in Hong Kong has reached a critical milestone. While the ultra-fast fashion giant continues to face criticism over its social and environmental practices, the order book for the operation is reportedly already fully covered by investor demand. This momentum comes at a time when an American lawmaker is urging major banks involved in the operation to withdraw from the deal.

Investor Demand Supports the Operation

Shein launched its public offering in Hong Kong on Monday, August 24. The group is offering 280 million shares at a price range of HK$47.60 to HK$49.50 per share. At the maximum price, the operation could raise about $1.8 billion and value the company at around $27 billion.

According to two sources close to the matter cited by Reuters, the order book was already fully covered as of August 25. The requests reportedly come from existing shareholders as well as funds specializing in investments in China and multi-strategy funds. The sources, who were not authorized to speak publicly, were not identified.

The final share price is set to be announced before trading begins, scheduled for September 1 on the Hong Kong Stock Exchange. However, the valuation would represent a significant decline from the nearly $100 billion peak reached by Shein in private markets in 2022.

Three Major American Banks Under Scrutiny by John Moolenaar

This development comes as John Moolenaar, Republican chairman of the special House committee focused on China, has publicly called on JPMorgan, Goldman Sachs, and Morgan Stanley to end their participation in the IPO.

In a statement released on August 25, the lawmaker accused these institutions of financially supporting a company facing allegations related to forced labor and supply chains linked to Xinjiang. He also framed their participation as a human rights and national security issue.

Moolenaar's stance has not yet been accompanied by any announcement of new legislative measures directly targeting the banks involved. However, it illustrates the increasingly geopolitical dimension of the Shein case as the company seeks to access public markets after several years of unsuccessful attempts.

Shein and the Xinjiang Controversies

Allegations of forced labor are one of the main points of tension surrounding Shein. Human rights organizations and several Western politicians have called for more guarantees regarding the sourcing of raw materials used by the group’s suppliers, particularly concerning cotton sourced from Xinjiang, a Chinese region where allegations of forced labor involving the Uyghur population are regularly reported.

An investigation by China Labor Watch published in 2025, focusing on Shein suppliers in Guangzhou, raised concerns about working conditions and also mentioned a risk regarding the presence of textiles from Xinjiang in certain products. Shein contested the ability to verify these findings in the absence of access to the full report while asserting it has implemented procedures to address risks in its supply chain.

Officially, Shein claims to prohibit forced labor and child labor among its suppliers and states that it applies a supply chain control program based on International Labour Organization standards.

However, the issue remains particularly sensitive. In July, Reuters reported that the prospectus for the Hong Kong IPO did not directly reference the controversies related to Xinjiang cotton, while more broadly mentioning the reputational risks the group faces.

After New York and London, Hong Kong as the New Step

The Hong Kong IPO represents the provisional culmination of a particularly complex journey. Shein had previously considered a listing in the United States and then in the United Kingdom. Its London project notably attracted significant attention regarding the transparency of its supply chain and the risks related to forced labor.

In 2024, the organization Stop Uyghur Genocide launched a campaign to prevent a potential listing in London, asking the UK Financial Conduct Authority to examine the risks associated with the company’s social practices. The UK regulator subsequently extended its review of the case amid concerns over the supply chain.

Shein's choice of Hong Kong thus comes in a very different context from that of Western financial markets. For Shein, this operation should allow access to capital markets while providing its historical investors with a liquidity opportunity.

A Significant Downgrade in Valuation

Beyond the ethical and political controversies, the IPO comes at a less favorable time for Shein financially. The maximum valuation of around $27 billion represents nearly 70% less than the nearly $100 billion level reached in 2022 during a private fundraising round.

The slowdown in growth, rising costs, changes in customs and tax regulations in several Western markets, and regulatory pressure now complicate the model based on very low-priced clothing and extremely rapid collection turnover. Reuters also highlights ongoing investor concerns regarding governance, environmental impact, and the group’s supply chain.

Nonetheless, the operation remains one of the significant IPOs expected in Hong Kong in 2026. Its success could signal a positive outlook for the Hong Kong financial market, while a more lukewarm reception would remind of the limits faced by fast-fashion companies as they transition from commercial phenomena to publicly traded entities.

A Major Test for Shein and Its Financial Partners

The fact that the order book is already covered does not mean that all uncertainties have disappeared. Investors will still need to assess Shein's ability to maintain its growth in a more demanding regulatory environment and respond to criticisms regarding its social and environmental practices.

The pressure from John Moolenaar adds a new dimension to the case. As American banks participate in an operation aimed at further opening Shein's capital to international markets, they now have to contend with a political contestation that goes far beyond the financial question.

For Shein, September 1 will thus represent much more than just a first listing. This entry into Hong Kong will be a confidence test for a group whose value has significantly declined since its peak, but whose ability to quickly attract investors remains intact.