A sign outside the office of fast fashion e-commerce company Shein in Guangzhou, southern China's Guangdong province.
Gao Yu | AFP | Getty Images
Shein will hold informal investor meetings for its planned London initial public offering in the coming weeks, three people familiar with the matter said, advancing preparations while awaiting approval from British regulators.
The China-founded online retailer plans to hold an informal roadshow mainly in Europe, during which a company preparing for an initial public offering answers questions from big investors and tests their investment interest, one source said.
The sources declined to be named because they were not authorized to speak to the media.
A spokesman for Singapore-based Shein declined to comment.
Shein confidentially submitted documents to Britain's market regulator in early June, initiating the process for the company to potentially list in London later this year, Reuters reported in June, citing sources.
The company, which was valued at $66 billion in a funding round last year, began considering a London IPO earlier this year after its initial New York plans fell through amid opposition from U.S. lawmakers.
Another person familiar with the matter said Shein was working to launch the listing this quarter, subject to approval from the Financial Conduct Authority, the UK's markets regulator.
Shein, known for its $5 tops and $10 dresses, is about to go on sale as its treatment of workers and environmental record come under increasing scrutiny.
Whether the fast-growing company can convince the world's largest institutional investors of the soundness of its business case and financial position will determine whether it reaches last year's $66 billion valuation.
Shein's preparations for a potential London listing mark a shift from its long-running U.S. IPO plans, which have hit roadblocks at home and abroad, Reuters reported.
The group confidentially submitted an IPO application to the U.S. Securities and Exchange Commission in November while seeking approval from China's securities regulator, sources said.
However, according to Reuters, the China Securities Regulatory Commission informed Shein earlier this year that it was not recommending a U.S. IPO due to the company's supply chain issues.
Shein's London stock listing plan still needs approval from the China Securities Regulatory Commission, and it is unclear whether the company has received any guidance from Chinese regulators.
As of Thursday, Shein was not mentioned in the list of approved overseas IPO candidates posted on the China Securities Regulatory Commission's website.
Shein's financial data are not public, but Bernstein analysts in April estimated that its net profit had more than doubled to $2 billion from $700 million last year, with a profit margin of 4.4% of sales.
Shein's share sale will boost London's moribund IPO market.
According to Dealogic, there will be only nine new listings in the UK this year, while there will be 18 new listings in 2023. Its IPO value lags behind other European countries and ranks 10th among listing venues in Europe, the Middle East and Africa.
Britain's markets regulator has fast-tracked a raft of new rules this summer to facilitate and encourage companies to list on the London Stock Exchange as it looks to catch up with New York and the European Union after Brexit.
Shein has faced resistance from several European governments, with Germany, Austria, Denmark, France and the Netherlands writing a joint letter last week calling on EU authorities to enforce EU standards on online platforms and expressing support for removing EU tariff exemptions. Euro packages.
Investors say removing such “minimum” tax breaks could hurt Shein's profitability.