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Online fast-fashion giant Shein has more than doubled its profits as it awaits regulatory approval from Beijing to go ahead with its blockbuster listing in New York or London.

Shein hit a record of more than $2bn in profits for 2023 and recorded roughly $45bn in gross merchandise value, the total value of sold goods on its website, said four people close to the company, which was founded in China but has moved its headquarters to Singapore.

The group’s profits last year surpassed the $700mn of net income it generated in 2022 and $1.1bn in 2021, according to a financing document seen by the Financial Times.

Rivals H&M and Zara owner Inditex reported net profits of SKr8.7bn ($820mn) and €5.4bn ($5.8bn) in their most recent fiscal years.

Shein, whose clothes are popular among Gen Z shoppers, is waiting for regulators in Beijing and Washington to approve its listing, which is expected to be the largest initial public offering of the year. The group was valued at more than $60bn in a recent financing round. Shein declined to comment on the finanical figures.

The IPO is seen as a bellwether of Beijing’s attitude towards companies that were founded in China but reincorporated overseas to avoid geopolitical tension. It is also a test of Beijing’s willingness to let Chinese companies raise billions of dollars on Wall Street after its crackdown on the technology sector.

Two people familiar with the progress of Shein’s application said they expected the China Securities Regulatory Commission and the Cyberspace Administration of China to approve the share sale in the coming weeks.

Although Shein has moved its headquarters to Singapore and makes all of its sales outside of China, the company was founded in the Chinese city of Nanjing and continues to run most of its business from the country, leading the group to seek approval from local regulators.

At the end of 2022, Shein had 10,382 employees in mainland China working for more than a dozen subsidiaries and handling everything from logistics to writing code, according to data provider Tianyancha. In contrast, LinkedIn shows the company has roughly 200 employees in Singapore.

Xu Yangtian, the 40-year old founder also known as Sky Xu, was born in China but has followed his company in moving to Singapore. He holds 37 per cent of Shein, according to lobbying disclosures filed in the US. Other major shareholders include Sequoia China, now known as HongShan, General Atlantic and Abu Dhabi sovereign wealth fund Mubadala.

Shein has been spending heavily on lobbying in Washington during the IPO push and amid growing scrutiny of the company’s model of air-shipping Chinese goods direct to US shoppers to avoid import taxes. Public records in the US show Shein spent nearly $2mn on lobbying over nine months last year.

The company’s substantial China presence has been criticised by lawmakers in Washington. Senator Marco Rubio in February urged US Securities and Exchange Commission head Gary Gensler in an open letter to “require extraordinary disclosures from Shein regarding its structure, interactions with the Chinese government and Chinese Communist party”.

The group filed confidential paperwork for a US listing in November, but a person close to Shein said the company had heard little from the SEC since then. Consequently, Shein is looking at London as a back-up option, said another person close to the company.

The pipeline of Chinese groups seeking large New York listings has been limited since the disastrous IPO of ride-hailing group Didi in 2021, which was forced by Beijing to delist over data security concerns.

A deep market downturn in Hong Kong has made it more difficult for Chinese companies to raise money closer to home. Alibaba’s logistics arm Cainiao became the latest group to abandon plans to sell shares in the market last week, suspending an IPO that some had hoped would value the company at up to $20bn.

Chair Joe Tsai blamed poor market conditions in the city for the retreat. “Markets are pretty depressed [and] there’s also lack of liquidity,” he said.

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