Chinese online fast-fashion retailer Shein made its long-awaited Hong Kong market debut Tuesday, only to fall flat in what can only be viewed as a disappointing IPO plagued by investor concerns about slowing growth, rising costs and an increasingly challenged international business model.

"Shein's many challenges are well known to investors and likely behind the sharp share-price fall on IPO day," Vey-Sern Ling, managing director at Union Bancaire Privée, wrote in a note. "Growth is slowing and losses rising amid stiff competition from both e-commerce and fast-fashion players. More critically, its business model continues to be disrupted by evolving international regulations."

Shen Meng, director at Beijing-based investment bank Chanson & Co., said, "With investors favoring AI and technology-related plays in Hong Kong, Shein's appeal is relatively limited as a traditional e-commerce company that relies heavily on price competition," adding, "Rising costs linked to US-China trade tensions and a less compelling growth story than Alibaba or PDD are likely to keep its valuation at a discount."

Shein raised $1.7 billion in the offering, giving the  Singapore-based retailer a market capitalization of around $26 billion. That represents a stunning $74 billion collapse from Shein's nearly $100 billion valuation during the COVID boom of 2022.

The IPO valued the company at more than 15 times estimated forward earnings, according to Bloomberg data. That is roughly double PDD Holdings' 7.4 multiple and above the Hang Seng Index's 10.7 multiple.

Shein shares initially plunged 10% during their debut earlier Tuesday before recovering most of those losses and ending the session flat.

In recent weeks, a Chinese robotics firm debuted in Shanghai with a blockbuster IPO, only to slide in subsequent sessions.

The stock is now down about 38% from its post-IPO peak.