On September 29, cross-border apparel company Shein-W (00625.HK) fell as much as ~14% intraday to HK$30.36, a record low since listing. Based on the closing price, Shein is down more than 35% from its IPO issue price. $SHEIN-W(00625)$
After a long and bumpy IPO journey, Shein listed on the Hong Kong Stock Exchange earlier this month at a valuation of about US$26 billion. At its 2022 peak, its valuation reached roughly US$100 billion, while its current market cap is only about US$16.7 billion.
On the news side, on September 28 Shein released its 2026 interim results for the first half of the year—its first interim report since going public. The results show that net revenue rose just 0.9% in Q2 2026, while operating profit fell 66.3% year on year; for H1 2026, net revenue grew 1%, and operating profit dropped 52.9% from the same period in 2025, extending the deterioration in profitability seen in the first three months of the year.
The report points out that the direct pressure on profits came from a sharp rise in fulfillment costs. In Q2, Shein’s fulfillment expenses rose 18.1% YoY to US$5.587 billion, with the fulfillment expense ratio climbing from 43.1% to 50.4%—far above the 0.9% revenue growth in the same period. The company mainly attributed the increase to higher oil prices and freight costs triggered by the Iran conflict, and explicitly said it absorbed part of the added costs itself rather than fully passing them on to consumers, in order to protect price competitiveness and order growth.
Looking at regional structure, the US and Europe weakened in tandem, further confirming pressure on the revenue side. In Q2, US revenue fell 6.0% YoY to US$2.5 billion, and Europe revenue fell 13.9% YoY to US$3.77 billion. The US market was mainly hit by the removal of the de minimis tariff exemption for packages under US$800; in Europe, ahead of the EU’s planned cancellation of the €150 low-value parcel duty exemption from July 1, 2026, the company raised prices and cut online advertising, dragging down sales volume. By contrast, other regions grew 21.6% to US$4.838 billion, with emerging markets such as Latin America showing especially strong growth and offsetting the US and Europe declines. Still, growth in emerging markets is mostly playing a hedging role for now and is not yet enough to reverse the group’s near-stalled overall revenue.
Outlook
The market’s current view on Shein’s Q3 2026 is not “bottoming out and rebounding,” but further pressure from weak demand combined with sticky costs, with the reversal window possibly delayed until Q4.
Bloomberg Second Measure, which tracks credit and debit card transactions, shows that in the three months through August and early September 2026, Shein’s US sales fell more than 10% YoY and have kept underperforming the broader US apparel industry since late 2025. Two core Chinese suppliers said orders from Shein in Q3 fell about 20%, with the decline widening from August to September; Similarweb data shows Shein’s global website visits turned negative YoY in August 2026, while Apptopia data shows app usage time fell more than 10% YoY in July–August and app downloads dropped more than 40% YoY in August. Early signs suggest the business pressure facing Shein has carried into Q3.
Jefferies noted that because the EU removed the low-value parcel duty exemption in July, the European market in Q3 will have to bear both the added fulfillment costs from new fees and the lower sales elasticity after price hikes.
Huaxi, Huachuang, Founders and other brokerages, when initiating coverage, estimated full-year 2026 revenue at about US$42.5bn–US$43.4bn and attributable net profit at about US$1.2bn–US$1.7bn. The broad judgment is that tariffs, freight costs and European compliance costs will keep squeezing profits in the near term, a clear reversal is unlikely in Q3, and the earnings inflection point is more likely to depend on the Q4 promotional peak—Singles’ Day, Black Friday, Cyber Monday and Christmas.
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