Hong Kong stocks rebound as concerns ease over lock-up expiries

Lead

Hong Kong stocks rebounded on Tuesday, with technology shares leading broad-based gains despite renewed geopolitical tensions in the Middle East. The Hang Seng Index rose 2.4 per cent to 24,057 at the noon break, while the Hang Seng Tech Index outpaced the broader market, surging 4.3 per cent.

At the centre of the rally was Knowledge Atlas Technology, also known as Zhipu AI, which surged 18 per cent even as the market digested the company's first major lock-up expiry following its Hong Kong listing earlier this year. The stock's gains came after it slid 14.6 per cent on Monday.

Coverage Comparison

Two reports from the South China Morning Post offered contrasting angles on the same market developments. One report focused on the potential sell-off pressure from a "torrent" of new share supply as lock-up periods end for hot AI and semiconductor picks, including Zhipu AI and MiniMax. The other highlighted the market's resilience, noting that the expected oversupply was "smoothly absorbed" after several cornerstone investors reaffirmed their holding commitments the day prior.

The difference in emphasis reflects a shift in sentiment over a short period. The cautionary report warned of "rising fears of a drain on liquidity" as many of the same companies were eyeing large secondary share placements. The optimistic report, however, noted that investor confidence had been renewed by the reaffirmed commitments.

Key Claims

The lock-up periods for AI model developers Zhipu (known as Z.ai internationally and trading as Knowledge Atlas Technology) and MiniMax end on Tuesday and Wednesday, respectively. According to the South China Morning Post, 25.68 million and 150 million shares become tradeable, out of total issued shares of 446 million and 314 million, respectively. Based on Tuesday's mid-day prices, the combined market value of the shares subject to the lock-up expiration amounts to HK$90 billion (US$11.5 billion).

MiniMax, which faces its own substantial lock-up expiry later this week, gained 2.8 per cent as investors held steady and waited for clearer signals on commercial demand and coming valuation metrics. The stock had lost 3.3 per cent on Monday and dropped a further 2.3 per cent on Tuesday morning before the rebound.

Zhipu gained 5 per cent on Tuesday morning after sliding 14.6 per cent on Monday.

Chinese autonomous driving firm Momenta Global posted a modest 3.4 per cent gain on its Hong Kong debut after raising HK$5.89 billion (US$750 million). Analysts said the muted debut reflected a more selective approach among investors, who were increasingly scrutinising valuations and demanding clearer pathways to long-term profitability in AI-adjacent ventures.

The market faced dual selling pressure, said Stevan Tam, associate director at Fulbright Financial. "These stocks have generally seen significant gains, and it is believed that investors may be looking to lock in some profits, which could limit their upwards momentum," he said. "At the same time, large-scale placements could intensify selling pressure."