Shein shares plunge 11pc after weak results show growth losing steam

The company has faced scrutiny over its environmental footprint and allegations of human rights violations, and faces growing competition from low-cost e-commerce companies such as Temu and AliExpress. — AFP pic

First Published: Tuesday, 29 Sep 2026 1:44 PM MYT

HONG KONG, Sept 29 — Shares in Chinese fast-fashion giant Shein plunged more than 11 per cent in Hong Kong on Tuesday after releasing disappointing financial results.

The company has faced scrutiny over its environmental footprint and allegations of human rights violations, and faces growing competition from low-cost e-commerce companies such as Temu and AliExpress.

The firm said on Monday that revenue grew just one per cent  on-year in the first six months of the year, while its operating profit halved.

By around lunch on Tuesday, Shein’s share price had pared some of the losses but was still down 10.9 per cent  at HK$31.44 (RM16.36).

Monday’s results were Shein’s first since its high-profile initial public offering this month, which put the company’s valuation at around US$26.3 billion — well short of the nearly US$100 billion during private fundraising rounds in 2022.

Net revenue from Europe fell 13.9 per cent to nearly US$3.8 billion for the second quarter, Shein reported.

The decrease “reflects a decline in sales volume as we raised prices and lowered online advertising spending” in anticipation of the removal of the customs duty exemption, the company said.

Another key market, the United States, saw revenue drop six per cent in April-June, reflecting the impact of tariffs.

Since its first day of trading on the Hong Kong Stock Exchange in September, Shein’s share price has fallen more than 35 per cent.

The accelerating decline in Shein’s operating profit “clouds the extent of a 2027 recovery from freight relief and an unproven push into higher-priced brands”, said Catherine Lim, an analyst at Business Intelligence.

“Management plans to absorb freight and tariff costs rather than raise prices to protect the company’s competitive position,” she said, adding that localising stock in Europe will lead to higher logistics costs in the short term. — AFP