HK Stock Market Move | (00625) Falls Over 3% Again; Fulfillment Expense Ratio Weighs on Performance; Jefferies Cuts Its Target Price to HK$23

Following yesterday's sharp decline of over 10%, (00625) fell more than 3% again this morning. As of press time, it was down 3.11% at HK$30.52, with a turnover of HK$11.2867 million. On the news front, SHEIN recently released its first interim results since listing. First-half net revenue was US$20.134 billion, up only 1% year on year; adjusted net profit was US$499 million, down 55.6% year on year. In the second quarter alone, net revenue was US$11.082 billion, up 0.9% year on year, while adjusted net profit was US$228 million, down 66.6% year on year. On expenses, the company's second-quarter fulfillment expenses were US$5.587 billion, up 18% year on year, with the fulfillment expense ratio rising to 50.4%. The relatively rapid increase was mainly attributable to higher oil prices, higher freight costs, and a higher share of the marketplace model. In addition, second-quarter net revenue in Europe fell 13.9% year on year to US$3.77 billion; US net revenue fell 6% to US$2.474 billion, with the year-on-year decline narrowing significantly from the first quarter. Jefferies noted in a research report that SHEIN's first-half revenue was in line with expectations, but a deterioration in regional mix and pressure on profit margins were the main focus. It believes there is still downside room in 2026-2027 market consensus estimates, and cut its target price from HK$26 to HK$23, maintaining an "underperform" rating.