J.P. Morgan: Initiates SHEIN-W (00625) with "Overweight" rating, target price HK$50

J.P. Morgan released a research report initiating coverage on SHEIN-W (00625) with an "Overweight" rating and a target price of HK$50 by the end of 2027. The bank noted that SHEIN's stock price has pulled back 29% since its IPO, while the Hang Seng Index fell 5% over the same period. Although it faces short-term pressure, the trough is only temporary. J.P. Morgan stated that SHEIN continues to add new customers and maintain order growth despite U.S. tariff adjustments and Middle East conflicts. As Middle East conflict-related costs subside and its EU business shifts to local stocking, revenue will stabilize starting from the fourth quarter, with profitability beginning to recover in the first quarter of 2027. The bank expects the company's adjusted net profit to reach US$985 million this year and US$1.97 billion in 2027. The target price corresponds to 9x 2027 forecast P/E plus cash value, and the bank believes the market is assigning quite limited valuation to the company's operating business, expecting valuation multiples to remain at low levels.