Shale gas reservoirs (SGR) are important replacements for conventional energy resources and have been widely exploited by hydraulic fracturing technologies. On the one hand, due to the inherent ultra-low permeability and porosity, there is stress sensitivity in the reservoirs generally. On the other hand, hydraulic fractures and the stimulated reservoir volume (SRV) generated by the massive hydraulic fracturing operation have contrast properties with the original reservoirs. These two phenomena bring huge challenges in SGR transient pressure analysis. Although some works in the literatures have been done on the transient pressure analysis of multi-fractured horizontal wells in SGR, unfortunately, none of them has taken the stress sensitivity and spatially varying permeability of SRV zone into consideration simultaneously. To fill this gap, this paper first idealizes the SGR to be four linear composite regions. What’s more, SRV zone is further divided into sub-sections on the basis of non-uniform distribution of proppant within SRV zone which easily yields spatially varying permeability away from the main hydraulic fracture. The stress sensitivity is characterized by the varying permeability depended on the pore pressure. By means of perturbation transformation and Laplace transformation, an analytical multi-linear flow model (MLFM) is obtained and validated by the comparison with the previous model. On the basis of our model, the flow regimes are identified and the sensitivity analysis of critical parameters are conducted to further understand the transient pressure behaviors. The research results provided by this work are of significance for well test interpretation and production performance analysis of SGR.