Scott Murdoch, Fanny Potkin, Kane Wu

HONG KONG/SINGAPORE – Chinese fashion retailer SHEIN plans to list in New York in the new year. Its founder, two sources familiar with the matter, is contemplating a citizenship change in order to avoid proposed stricter regulations for offshore IPOs from China.

The company didn’t immediately disclose how much it was trying to raise since its New York debut.

The completion of an initial public offering (IPO) by a Chinese firm in America would make it the first significant equity deal since July, when regulators in China’s second largest economy tightened their oversight.

SHEIN was established by Chris Xu (Chinese entrepreneur) in 2008. The plans for a U.S. IPO were first considered about two years ago. But, due to uncertain markets, and the rising U.S.–China tensions, SHEIN had to be scrapped, sources claimed.

Because the plans were confidential, both sources did not want to be identified. SHEIN spokespersons stated that they do not plan to publish the plans.

It is one the most popular online marketplaces for fashion that targets overseas customers. Its largest market is the United States.

Sources claimed that SHEIN founder Xu wanted to apply for Singapore citizenship in order to avoid China’s stricter regulations on foreign listings. They said that the change of citizenship would make it easier to get an offshore IPO if successful.

The spokesperson for SHEIN stated that neither Xu nor any other SHEIN executive have applied to Singaporean citizenship. However, she did not elaborate. Reuters inquiries sent through this spokesperson did not reach Xu.

China’s Cyberspace Administration has issued new rules and China’s Securities Regulator will finalize the off-shore listing filing system. These changes are expected to increase complexity, if any, of U.S. listings for Chinese companies.

Draft rules of the securities regulator for offshore listing targets those companies whose majority of top management is either Chinese or who reside or are involved in main business activities in China.

VALUATION JUMP

According to SHEIN, SHEIN has shipped to more than 150 territories and countries via its numerous global warehouses.

One source said that it earned around 100 billion yuan (or $15.7 billion) in revenues in 2021. It took advantage of the online pandemic, which saw global consumption shift to digital platforms. According to them, its value was $50 billion by early 2021.

One source said that the valuation has more than doubled over the last year.

According to CB Insights, the company was valued at $15billion in its August 2020 funding round. Its investors included Sequoia Capital China and IDG Capital.

Coresight Research reports that SHEIN’s sales for 2020 were $10 billion. The company also added over 2,000 new items to its website every week.

SHEIN spokeswoman said that it was a private business and did not reveal financial information.

SHEIN has employed Bank of America, Goldman Sachs, JPMorgan (NYSE) and Bank of America (NYSE) for the IPO. According to a source familiar with the situation and another person who is knowledgeable about the matter,