Shein eyes a valuation rivalling H&M. Will the market buy it?

Ahead of its Hong Kong IPO, the e-commerce firm argues its supply chains and business model give it an edge over traditional rivals

Online fast-fashion platform Shein believes it deserves a premium valuation comparable to that of industry peers like H&M, citing its business model and global customer base as major competitive advantages, according to internal documents seen by the South China Morning Post.

Shein cited analysts who said the market should view the company as a global fashion giant similar to Zara’s parent company Inditex and H&M, rather than as a regional Chinese brand.

The documents showed that an unnamed investment bank in the United States had projected Shein’s net profit would grow at a compound annual rate of 12 per cent between financial years 2025 and 2028, beating Inditex’s 9 per cent and H&M’s 4 per cent.

The company stressed its “LATR” model – in which it tests products in small batches before scaling up production through its smart supply chain – as a core advantage. The approach delivers inventory turnover cycles of just 36 days, far outperforming Inditex’s 71 and Uniqlo parent company Fast Retailing’s 114, according to Shein.

The documents further suggested that Shein deserved a valuation multiple that matched or exceeded those of Inditex and H&M, which typically have price-to-earnings ratios of 25 and 20, respectively.