Summary of Key Points
In 2026, the Hong Kong stock market is facing the largest share lock-up release in its history, with a total market value of HK$1.7 trillion, peaking in September (with HK$530 billion released in a single month). This wave of share releases is a consequence of the robust IPO activity in 2025, as technology and biopharmaceutical companies that went public last year see their restricted shares become available this year. The performance of these companies after the release has varied dramatically: Zhipu, a company in the AI sector, saw its stock price soar by HK$100 billion despite market challenges, while Yunzhisheng and Yaojieankang experienced significant declines. This reflects the ultimate test of the companies' fundamentals by the market, as well as the pressures on liquidity and the withdrawal of venture capital firms.
A Divergent Market: Some Soar, Others Plummet
The day of share release does not necessarily lead to a sharp drop, but "differential performance" has become a defining factor:
- Zhipu: Despite nearly 70% of its cornerstone investors choosing to lock in their shares before the release, the stock price rebounded on the day, with a 1000-hong Kong-dollar increase in market value, and the investors' profits more than tripling. The key reason is the market's recognition of the strength of its AI models (whose market value surged from HK$50 billion to HK$1 trillion in just half a year).
- MiniMax: Despite over 80% of cornerstone investors locking in their shares and the founder forgoing compensation, the stock price still fell on the release day. This is due to the large proportion of restricted shares (50% of the total capital stock), which continued to fuel concerns about selling pressure.
- Yunzhisheng/Yaojieankang: These companies saw their stock prices halve and even fall below their initial offering price, indicating that their fundamentals could not support their high valuations or that their previous gains were overly speculative.
In short, for companies with solid foundations, share releases become an opportunity to realize their full potential; for those without, it marks the bursting of bubbles.
The Origin of the HK$1.7 Trillion in Share Releases: All from Last Year's IPOs
The Hong Kong Stock Exchange was the global leader in IPOs in 2025 (119 companies, raising HK$286.9 billion), and now those companies' restricted shares are being released:
- Timing Determined by Rules: Cornerstone investors in the Hong Kong market are required to lock in their shares for 6 months, while controlling shareholders must lock them in for 6–12 months, leading to this concentrated release of shares this year.
- Unprecedented Scale: The total market value of share releases in 2026 is HK$1.55–1.7 trillion, three times that of 2025; the September release alone amounts to HK$530 billion, exceeding the total funds raised through all IPOs last year.
- Sector Focus: Technologies (AI, GPUs), healthcare, and consumer discretionary sectors account for 60% of the releases, indicating these are the main drivers of market activity.
This year's share releases are the result of last year's IPO boom, but whether the outcome is profitable depends on the companies themselves.
Liquidity: A Crucial Issue for the Hong Kong Market
The biggest concern with share releases is the potential for selling pressure, but it depends on whether there is enough capital in the market to absorb these shares:
- Historical Lessons: According to UBS International, 70% of new stocks underperform the Hang Seng Index before and after their share releases between 2018 and 2025, especially during periods of market weakness.
- Current Situation: IPO activity remains strong this year (15 companies per week, with 7 listings daily), but more shares are opening below their initial offering price (e.g., Puyuan Jingdian and Tongrentang Yiyang). This suggests a lack of liquidity in the market.
- Investor Perspectives: If the market improves in the future, shareholders may choose to sell their shares in phases. However, market sentiment is unpredictable, and liquidity remains a significant risk.
It's like a party with too few drinks for too many guests; if there are too many shares released and the market cannot absorb them, prices will fall.
Share Releases as a Mirror of Company Value
Share releases serve as a test of a company's true value:
- Fundamentals Are Key: Zhipu's success is due to real progress in its AI models, while Yunzhisheng's decline reflects a mismatch between its performance and its valuation. Without solid fundamentals, even the best stories cannot withstand market pressure.
- VC/PE Challenges: Companies funded by VC/PE may have impressive book profits at the time of IPO, but whether they can actually sell their shares for a good price after the release is crucial for their investors' returns.
- IPO Pricing vs. Market Verification: IPOs set a theoretical value for companies, while share releases reveal the actual market value. Once the hype fades, it becomes clear who has what real value.
In summary, the wave of share releases is a major test of both companies and the market's rationality. Investors should focus on more than just the stories behind these companies; they need to assess their potential profitability and core competitiveness.
This release period is not the end but the beginning of a new phase for the Hong Kong stock market. Excessively inflated valuations will be corrected, and only truly valuable companies will remain. For ordinary investors, it's wise to avoid those companies that rely on catchy stories and instead focus on those with solid financial foundations.