Hong Kong’s equity market is preparing for an unprecedented wave of lock-up expirations that could unleash billions of dollars’ worth of shares onto the market, raising concerns about increased selling pressure at a time when investor sentiment toward the city’s stock market remains fragile.
Some of the best-performing initial public offerings (IPOs) of the past year will begin releasing previously restricted shares this week, giving cornerstone investors and early shareholders their first opportunity to cash out after months of extraordinary gains.
Market participants say the timing could create a significant overhang for Hong Kong equities, particularly as investors grapple with slowing momentum in the city’s broader stock market.
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Chinese artificial intelligence developer Knowledge Atlas Technology will be among the first major companies to face lock-up expirations, with 25.6 million shares, representing nearly 6% of its outstanding stock, becoming eligible for trading on Wednesday following the end of a six-month cornerstone investor restriction.
The stock has been one of Hong Kong’s standout performers, soaring more than 1,200% since its market debut, creating strong incentives for early investors to realize profits.
Other high-profile technology listings are also approaching similar milestones.
AI startup MiniMax will see shares equivalent to approximately 45% of its outstanding stock become tradable, while Shanghai Iluvatar CoreX Semiconductor, another company benefiting from investor enthusiasm surrounding artificial intelligence, will have about 4.3% of its shares unlocked.
In total, six recently listed companies are scheduled to experience lock-up expirations this week.
The release of such a large volume of previously restricted shares comes after a remarkable period for Hong Kong’s IPO market.
According to EY, companies that listed during the first half of 2026 generated an average first-day gain of 61%, reflecting strong investor appetite for new listings, particularly those linked to artificial intelligence, semiconductors and advanced technology.
However, those impressive IPO returns stand in sharp contrast to the performance of Hong Kong’s broader equity market. The benchmark Hang Seng Index has declined 8.9% this year, highlighting the divergence between enthusiasm for select new technology listings and persistent weakness across the wider market.
Analysts warn that the combination of substantial gains and expiring lock-up periods could encourage widespread profit-taking.
Cornerstone investors, institutional shareholders, and early backers who were prohibited from selling immediately after the IPO may now choose to lock in returns, increasing the supply of shares available to the market.
Morgan Stanley believes the pressure could intensify over the coming months. The investment bank expects secondary selling activity to become particularly concentrated in July and September, describing lock-up expirations as one of the principal near-term risks facing Hong Kong equities.
“These events can create liquidity headwinds even when fundamentals remain intact,” Morgan Stanley analysts wrote, adding that the expected increase in secondary selling forms part of the bank’s cautious outlook on the Hong Kong market.
Goldman Sachs estimates the scale of the challenge could be unprecedented. The investment bank projects that approximately $274 billion worth of previously locked-up shares will become eligible for trading across Hong Kong over the next 12 months, representing the largest volume of lock-up expirations the market has ever experienced.
Historically, such events have often weighed on share prices.
Goldman Sachs found that stocks typically decline between 4% and 7% during the three to six months following major lock-up expirations, as additional supply enters the market and investors take profits. The impact could be particularly pronounced among artificial intelligence companies, many of which have enjoyed spectacular gains fueled by global enthusiasm for AI-related investments.
Chinese AI developers and semiconductor companies have attracted substantial capital this year as investors have sought exposure to Beijing’s efforts to strengthen domestic technology capabilities while benefiting from the global AI infrastructure boom.
Whether those elevated valuations can withstand a surge in secondary selling remains uncertain.
However, beyond the immediate market impact, the record volume of expiring lock-ups reflects Hong Kong’s resurgence as a preferred listing destination for mainland Chinese technology companies.
After several years of subdued fundraising activity, improving regulatory conditions, renewed investor appetite, and robust demand for AI-related assets have revived the city’s IPO market. However, analysts caution that a successful primary market does not automatically translate into sustained secondary market performance.