Shein’s draft Hong Kong IPO prospectus, filed on Sunday, reveals a $99 million net loss for the first quarter of 2026 — a sharp reversal from the $395 million profit it posted a year earlier. The disclosure lands just as the fast-fashion giant prepares investor roadshows for a listing that could value it at $40 billion to $50 billion, less than half the $100 billion figure discussed during its 2022 funding round.
The loss was driven by two distinct forces. A $328 million fair-value charge on convertible redeemable preferred shares — an accounting adjustment tied to investor shares that will convert into ordinary stock — accounted for the bulk of the red ink. But the filing also flags a more structural headwind: the removal of the U.S. “de minimis” duty exemption, which since May 2025 has subjected China-origin products sold by Shein to tax rates ranging from 10% to 87.5%. The company states the policy change has had an “adverse impact” on U.S. sales and overall growth, and has contributed to higher expenses.
Revenue still edged up 1.1% to $9.05 billion from $8.95 billion a year earlier, but the near-flat top line underscores how regulatory shifts are compressing the economics of Shein’s cross-border model. The European Union added another layer of pressure this month by imposing a €3 fee on low-value e-commerce imports, a move aimed at what Brussels calls unfair competition from China. Europe accounts for roughly a third of Shein’s revenue, according to Euromonitor data cited in the filing.