Chinese online fashion retailer SHEIN is apparently heading to Wall Street. It could be one of the biggest stock market debuts of 2024, but what do analysts say about it?
• SHEIN is probably pushing its way onto the trading floor in New York
• Criticism of working conditions
• Analysts cautiously optimistic for SHEIN IPO
SHEIN has apparently filed a confidential IPO application with US regulators and has begun discreet discussions with potential investors. As the Bloomberg news agency reported, citing people familiar with the matter, this IPO could take place as early as next year. Goldman Sachs, JPMorgan Chase and Morgan Stanley have been hired as lead underwriters for the IPO. According to insiders, SHEIN has not yet decided on the volume of the IPO, but according to an earlier Bloomberg report, the fast fashion retailer is hoping for a valuation of up to $90 billion.
Controversial company
Although SHEIN was founded in mainland China in 2012, it is now headquartered in Singapore. The company produces clothing in China, but sells it exclusively abroad, primarily in the USA and Europe. A direct shipping strategy is used: the majority of the products are shipped to customers in individually addressed packages directly from China by plane.
Thanks to its low prices, SHEIN has now become one of the world’s largest online fashion houses. However, its low prices have also exposed the company to suspicion of having its goods manufactured under inhumane conditions. In addition to poor working conditions in the factories, the company also came under criticism for overproducing clothing.
However, even this criticism could not stop the company’s rise. The IPO that is now apparently planned could be one of the largest in 2024. In addition, in view of the Sino-American tensions, it would be an indicator of the interest of Western investors in Chinese companies. But what do analysts think of the cheap fashion group’s stock market plans?
This is what analysts say about the SHEIN IPO
Given the recent rather lackluster debuts – just think of the German sandal manufacturer Birkenstock – the market environment currently does not seem to be particularly good for the SHEIN IPO. “It doesn’t seem like the best time for SHEIN to go public, but when they need capital, the markets are open… and investor sentiment is more positive than it was a few weeks ago,” says Jason Benowitz. “If investors can review the financials, I expect growth to be pretty strong historically…The key question will be whether they can maintain the pace or continue to gain market share going forward,” the senior portfolio manager at CI Roosevelt said, according to Reuters cautiously optimistic.
Neil Saunders also believes that the SHEIN IPO could be a success: “As a significant and highly disruptive player in the retail space, SHEIN will attract a lot of investor interest,” GlobalData’s managing director told the news agency.
As Aequitas Research analyst Sumeet Singh explained to Reuters, large companies like SHEIN are currently tapping the capital market because interest rates are rising and US regulations for small retailers may soon change. “At the moment it’s probably as good as it gets for them,” he says.
Editorial team finanzen.net
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