Jefferies: Cuts Shein (00625) target price to HK$23, maintains "Underperform" rating

Jefferies released a research report stating that Shein's (00625) first-half revenue was in line with expectations, but the deteriorating regional mix and margin pressure were the main focus, and it believes there is still downside to 2026-2027 market consensus estimates. It cut its target price from HK$26 to HK$23, maintaining an "Underperform" rating. The bank now expects the company's 2026-2027 adjusted net profit to be US$1.155 billion and US$1.432 billion respectively, 22% and 25% below market expectations, but expects the market to revise its forecasts downward in the same direction. The bank expects the market will initially cut 2026-2027 earnings forecasts by about 15-20% and 10-15% respectively, with a second round of downgrades to follow after third-quarter 2026 results confirm weakening in the European business.