Key facts
- An unprecedented wave of IPO lock-up expirations is set to occur in Hong Kong this week.
- Knowledge Atlas Technology will have 25.6 million shares freed, nearly 6% of its outstanding shares.
- MiniMax and Shanghai Iluvatar CoreX Semiconductor are also among companies with upcoming lock-up expirations.
- Goldman Sachs estimates $274 billion in locked-up shares will be released into the Hong Kong market over the next 12 months.
- Historically, prices dip 4% to 7% within three to six months of lock-up expiration.
An unprecedented wave of lock-up expirations for Hong Kong IPOs is set to occur this week, potentially creating an overhang on the city's already struggling stock market. Brokers anticipate this could lead to significant selling pressure.
Knowledge Atlas Technology, a Chinese AI developer whose stock has surged over 1,200% since its listing, will see 25.6 million shares, nearly 6% of its outstanding shares, freed from a six-month cornerstone investor lock-up on Wednesday. MiniMax and Shanghai Iluvatar CoreX Semiconductor are also among six companies facing expirations this week, with 45% and 4.3% of their respective outstanding shares set to be unlocked.
The strong returns of new listings could further fuel profit-taking. The average first-day return for Hong Kong IPOs in the first half of 2026 was 61%, according to EY, contrasting with the broader market's sluggish performance. Hong Kong's benchmark Hang Seng Index is down 8.9% this year.
Analysts at Morgan Stanley noted that secondary selling pressure will be most concentrated in July and September, stating that these events can create liquidity headwinds even when fundamentals remain intact. This cautious outlook is a key reason for the bank's reserved stance on the Hong Kong market in the near term.
Goldman Sachs estimated that $274 billion worth of locked-up shares will be released into the Hong Kong market over the next 12 months, a record high. Historically, prices tend to dip 4% to 7% within three to six months of such releases, according to Goldman Sachs analysts.