00:00From runway success to reality check,
00:04Sheen's float has finally hit Hong Kong's financial market.
00:07The listing has been years in the making after the fast fashion giant
00:11abandoned plans to go public in New York and London.
00:14The company was once valued at as much as 100 billion US dollars.
00:19It's now down nearly 75%.
00:23The timing of its debut could hardly have come at a worse moment.
00:26Energy prices rising globally, shipping costs also remain elevated.
00:32So all of this together with the tariff,
00:35it basically means that again, profit margin may not be as high as before.
00:40But Sheen's window to go public was narrowing.
00:44Net income plunged 39% last year.
00:46And in the first quarter of this year, it recorded a 99 million US dollar loss.
00:52Now, investors are asking a bigger question.
00:56Where exactly does Sheen's growth come from next?
00:59The model that made Sheen a success is now under fierce scrutiny.
01:03From how it operates to the environmental impact of producing so much, so cheaply.
01:08Fast fashion critics point to the mounting cost of its brick neck expansion.
01:13Even though Sheen claims to be producing items that are on demand,
01:18it's actually encouraging the production and consumption of trend-led items that people
01:23are just really going to forget in a few weeks' time and therefore end up in landfill.
01:28Sheen built its business around producing huge volumes of cheap clothes
01:32through a network of suppliers in China.
01:35But that model is being squeezed by tougher trade rules in Western markets.
01:41It took a big hit last year when the US ended tariff-free entry for packages under 800 US dollars
01:47from China and Hong Kong.
01:49In July, the European Union similarly scrapped its exemption for low-value imports
01:55to curb a flood of cheap, unregulated goods from Chinese e-commerce platforms.
02:00French customs authorities say small parcel imports from China have already fallen by up to 40%.
02:09Sustainability advocates say tougher rules are a step in the right direction.
02:13But the listing is a double-edged sword, bringing more scrutiny along with pressure to expand.
02:19On the one side, the process of a private company becoming listed in itself
02:25brings with it a much more regulatory pressure from investors.
02:29But on the flip side, the concern that we as advocates would have is that
02:32the increased access to capital and the increased driver to drive revenue growth
02:38will itself create much more pressure on that business to sell more and more clothes.
02:43For Xi'in, Hong Kong may have been the most viable route to the public markets.
02:48And other companies facing similar obstacles in the West
02:51could find themselves turning to the Chinese financial hub too.
02:54It's not only about Xi'in.
02:56If there are other companies that may face a similar situation in the future
02:59and they may also be forced to adopt the same model.
03:03Xi'in's journey to Hong Kong is a story of retreat as much as arrival.
03:07And it could signal a wider shift.
03:10As Chinese companies face growing pushback in Western markets,
03:14Hong Kong is a crucial location for raising capital.
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