By Selena Li and Kane Wu
HONG KONG, Aug 27 (Reuters) - Online fast-fashion retailer Shein is set to price its Hong Kong initial public offering near the midpoint of its marketed range, raising $1.7 billion and valuing the company at about $26.5 billion, two people with knowledge of the matter said.
The company is set to price the deal at HK$48.56 a share, near the midpoint of its HK$47.60 to HK$49.50 range, the people said, raising about HK$13.6 billion ($1.73 billion).
The sources spoke on condition
of anonymity as the information is not publicly available. Shein did not respond to a request for comment.
The valuation confirms a Reuters report last week that Shein's IPO was set to value the company at about one-quarter of its nearly $100 billion private market peak in 2022, and well below its $66 billion valuation in a 2023 fundraising round.
Shein, which is headquartered in Singapore and was founded in China, launched its Hong Kong IPO on Monday. The overall IPO book had been fully covered, Reuters reported on Tuesday.
The IPO follows attempts over the past four years to list in New York and London. Shein, known for selling $5 dresses and $10 jeans in about 160 countries, has faced regulatory challenges and business pressure in its key U.S. and European markets.
Shein is due to announce the final offer price on August 31, with trading expected to begin the following day.
Cornerstone investors, led by existing shareholders Boyu Capital, Tiger Global and General Atlantic, have subscribed for about $383 million of shares, its prospectus showed. Tencent, Greenwoods, Taikang Life and UBS Asset Management will also buy shares.
Shein said it would use about 80% of the proceeds to improve its technology and expand its brand and global reach.
It has also agreed to pay up to about $3.5 billion in cash to certain investors who bought special shares in earlier private funding rounds.
Shein is facing slower revenue growth, weaker earnings and shrinking margins, adding to concerns over higher trade costs, tougher regulation and competition.
The company expects first-half revenue growth to broadly match the 1.1% reported in the first quarter, while its operating margin is expected to decline slightly.
($1 = 7.8401 Hong Kong dollars)
(Reporting by Selena Li and Kane Wu in Hong Kong; Editing by Sumeet Chatterjee, Christopher Cushing and Jamie Freed)
