Shein Published Preliminary Prospectus Before IPO: $99 Million Quarterly Loss

The online fashion giant Shein has moved one step closer to an IPO on the Hong Kong Stock Exchange, after publishing its draft prospectus on Sunday. The document reveals that the company's profitability was hit after the United States cancelled the customs duty exemption on imports of low-value shipments, according to a report on the Investing website.

The publication of the prospectus comes after the China Securities Regulatory Commission approved Shein's request for a Hong Kong IPO on July 10, putting the company's plans back on track following unsuccessful attempts to list in New York and London. The prospectus gives investors their first detailed look at Shein's financial performance ahead of the Hong Kong IPO, illustrating its ability to continue growing sales even when profitability is under pressure.

The IPO is expected to serve as a test of investor appetite for large offerings by consumer companies, after several prominent IPOs were postponed amid weakening retail spending. The draft prospectus does not include the size of the offering, the share price, the amount the company is seeking to raise, or the expected timeline.

The prospectus shows that Shein's revenue totaled $41.8 billion in 2025, compared to $38.7 billion in 2024 and $32.1 billion in 2023. However, net profit fell by 38.7% to $2.064 billion in 2025, compared to $3.365 billion the year before. The document also shows that the company's performance continued to weaken at the beginning of 2026, with a net loss of $99 million recorded in the first quarter, compared to a net profit of $395 million in the same period last year.

According to a report on the CNBC website, the financial data gives investors a clearer picture of the pressures Shein is facing as it seeks to raise new capital amid rising costs, a slowdown in growth, and intensifying regulatory scrutiny. The loss in the first quarter was partly due to an accounting change, under which the company recorded an expense of $328 million for the fair value adjustment of convertible redeemable preferred shares.

Shein noted that the Trump administration's decision to cancel the "de minimis" exemption in May 2025, which until then allowed entry into the US without customs duties for shipments worth less than $800, harmed the company's operations, weighed on sales and overall growth, and increased operating expenses. As a result, products originating in China and sold directly by Shein or through its marketplace, and shipped to customers in the US, are now subject to import duties at rates ranging from 10% to 87.5%.

"In response to the increase in tariffs and taxes, we are exploring a wide range of options, including raising prices in the US market to offset some of the increase in costs," the company stated. Shein's revenue in the US fell by 14.3% to $2.04 billion in the first quarter, compared to $2.38 billion in the same quarter the year before. Europe accounted for about a third of Shein's revenue in 2025 and may also be affected this year by European Union tariffs.