By Summer Zhen
HONG KONG, Aug 31 (Reuters) - Shares of online fast-fashion retailer Shein slumped more than 10% in gray-market trading on Monday, one day ahead of its Hong Kong Stock Exchange debut.
The company raised $1.7 billion at HK$48.56 a share, valuing it at about $26.5 billion, according to sources who declined to be identified. Official pricing is due to be announced later on Monday.
Within a few minutes after the start of gray-market trading, major Hong Kong brokers — Futu Securities, Bright
Smart and Phillip Securities — quoted the shares as having dropped over 10%.
Gray market prices are quoted by brokerages ahead of a security being officially traded on an exchange.
At Futu, Hong Kong's biggest retail brokerage by volume, Shein's stock was last traded around HK$42, according to its mobile app.
Shein's valuation has dropped to slightly above a quarter of its nearly $100 billion private market peak in 2022, hit by tariff and duty changes in the U.S. and Europe that have undermined the foundations of its business.
The sharp valuation cut reflects "caution among both retail and institutional investors. Investors see greater potential in AI and robotics themes than in fast fashion at the moment," said Bevis Ho, senior analyst at Futu Securities.
(Reporting by Summer Zhen, writing by Scott Murdoch, Editing by Louise Heavens and Edwina Gibbs)
