Core Insights - SHEIN's Singapore headquarters reported a revenue exceeding $37.04 billion for 2024, marking a nearly 20% year-on-year increase, while net profit fell over 15% to $1.099 billion [1] - The total assets of SHEIN's Singapore headquarters reached $15.27 billion in 2024, a more than 70% increase from $8.85 billion in 2023 [1] - Concerns have been raised regarding SHEIN's potential tax avoidance by shifting significant revenue to Singapore, alongside speculation about its intentions to relocate its headquarters back to China to facilitate a Hong Kong IPO [1][2] Financial Performance - SHEIN's Singapore headquarters paid over $188 million in local taxes for 2024, equivalent to over 1.34 billion RMB [2] - From 2021 to 2023, SHEIN's net profits in Singapore were reported as 1.41 billion RMB, 4.55 billion RMB, and 9.32 billion RMB, totaling over 15 billion RMB, with cumulative local tax payments exceeding 3.3 billion RMB [2] Regulatory Challenges - SHEIN is facing increasing scrutiny and challenges in overseas markets, particularly in France, where it has encountered a €190 million (approximately 1.59 billion RMB) fine for compliance issues [2] - The company's expansion into physical retail in France has sparked backlash, leading to the withdrawal of several local brands from its partnered stores [2] - The combination of compliance issues and rising sales costs may further pressure SHEIN's profitability, as indicated by the 15% decline in net profit reported for 2024 [2]

Core Viewpoint - The recent news highlights SHEIN's strategy of transferring revenue from its UK subsidiary to Singapore to minimize tax liabilities, raising concerns about tax fairness and compliance [1][3]. Group 1: Financial Performance and Taxation - SHEIN's UK subsidiary reported sales of £2 billion in the last year but only paid £9.6 million in corporate tax, prompting public scrutiny regarding the actual profit reported in the UK versus that reported in Singapore [3]. - A significant portion of the sales, over £1.72 billion (approximately ¥16.6 billion), was classified as procurement costs transferred to the Singapore headquarters, resulting in minimal taxable income in the UK [3]. - In contrast, SHEIN's Singapore operations benefited from a low tax rate of 5% under Singapore's "Development and Expansion Incentive Scheme," leading to a total tax payment of nearly ¥2 billion over three years [6][7]. Group 2: IPO and Market Strategy - SHEIN's potential IPO in Hong Kong is seen as a strategic move, with the company aiming to present better financial performance by consolidating UK revenue under its Singapore headquarters [5]. - If SHEIN successfully lists in Hong Kong, it could become the largest IPO in the market this year, with an estimated market valuation approaching HK$400 billion, significantly exceeding previous major listings [5]. - The timing for SHEIN's IPO is favorable, as the Hong Kong market has seen substantial fundraising activity, making it an opportune moment for the company to enter [5]. Group 3: Headquarters Relocation and Regulatory Considerations - There are indications that SHEIN may consider relocating its headquarters back to China to facilitate its Hong Kong IPO, which could enhance its chances of receiving regulatory approval [6]. - However, the company faces challenges in this potential relocation, particularly regarding the Singapore government's support, which has been crucial for SHEIN's operations in recent years [6][7]. - The outcome of SHEIN's headquarters relocation and its implications for the IPO remain uncertain, as the company has not disclosed specific plans regarding this move [7].