HK Stock Market Move | Shein-W (00625) drops over 8% to a new post-listing low; Jefferies initiates with "Underperform" rating and a target price of HK$26.

Shein-W (00625) opened flat today before quickly declining, hitting an intraday low of HK$36.68, a new low since listing. As of press time, it is down 8.19% at HK$36.78, with a turnover of HK$63.5569 million. On the news front, Jefferies initiated coverage on Shein with an "Underperform" rating and a target price of HK$26, implying approximately 35% downside from last Friday's closing price of HK$40.06. The bank noted that Shein's profitability relies on low-cost parcels, the dense concentration of suppliers in Guangdong, and supplier-funded innovative initiatives. As these advantageous costs rise, it expects returns to weaken and valuations to come under pressure; it also forecasts that the company's earnings per share for fiscal years 2026 and 2027 will be 3% and 20% below market consensus, respectively. Shein listed on September 1 at an issue price of HK$48.56 and broke below its issue price on its first day of trading. The current share price has fallen about 24% cumulatively from the issue price. Hang Seng Indexes Company announced on September 2 that Shein meets the fast entry rules for the Hang Seng Composite Index and will be officially included in the Hang Seng Composite Index and its sub-indices after market close on September 14, effective from September 15. However, because Shein-W has a "weighted voting rights" structure, it will still need about 7 months before it can be included in Stock Connect.