Shein is examining proposals to lower the cost base for certain late-stage investors as it readies a Hong Kong initial public offering that is expected at a reduced valuation, people familiar with the situation said.
Under the options under review, the fast-fashion retailer could provide a mix of cash payouts and extra Class B shares to investors who participated in its pre-Series D, Series D and Series D+ funding rounds. The aim of the adjustments would be to bring those investors' effective costs in line with an anticipated IPO valuation of about $40 billion, according to the people briefed on the matter.
Those involved in the deliberations emphasize that discussions are ongoing and that no final decisions have been made. The precise combination of cash and shares that might be offered would depend on the valuation Shein ultimately secures when it lists, the sources said.
Shein did not immediately respond to a request for comment. The report could not be immediately verified by the news organization that published the initial account.
Financial disclosures issued by the company earlier this month show a swing in near-term profitability. On July 26, Shein reported a $99 million net loss for the first three months of the year, compared with a $395 million net profit in the same period of 2025. That shift in results has prompted questions about whether the valuation the company is pursuing for its IPO is supported by current financial performance.
Context and process - The reported proposals are structured to give late-stage shareholders alternatives that would reduce their invested cost if the IPO establishes a lower valuation. Because the potential cash-and-share packages would be tied to the IPO outcome, the final terms would be contingent on the price set at listing.
Current status - Discussions remain in flux and no binding offers have been announced. The company has not confirmed or denied the reports.
The developments highlight the mechanics companies may consider to manage investor expectations and align private-round economics with public-market pricing as they move toward a listing.