Shares of Chinese AI startups Z.ai (2513) and MiniMax (0100) face near-term pressure as cornerstone investor lockups worth over HK$50 billion expire this week, which could prompt a rotation back into traditional tech, analysts say.
Z.ai, also known as Zhipu AI, will unlock 25.68 million shares for cornerstone investors on Wednesday. These shares, accounting for 5.8 percent of the total equity, are worth HK$46 billion based on the closing price last Friday.
The stock has plunged more than 20 percent in the past few days after hitting a market value of HK$1 trillion last month. It was still up 14.4 times from its initial public offering in January.
Bloomberg reported earlier that the company is considering a multibillion-US-dollar share sale in the SAR following the wave of AI frenzy.
Its peer MiniMax will also see 16.5 million cornerstone shares unlock on Thursday as the lockup period ends, potentially flooding the market with HK$5.7 billion worth of equities based on Friday’s closing price.
The current high valuations are driven heavily by market sentiment and momentum across the broader AI sector, and the market may need some time to absorb this extra supply, analysts said, advising investors to stay cautious.
Z.ai and MiniMax were included in the Hang Seng Tech Index in early June and are planning to list in the A-share market.
Still, the expirations should have only a minor impact on benchmark indices and overall Hong Kong market sentiment, analysts said.
Traditional tech stocks such as Tencent (0700) and Alibaba (9988) may offer better upside potential, as their relatively low valuations should continue to attract capital inflows, they added.
Meanwhile, investors are also closely watching SpaceX's inclusion in the tech-heavy Nasdaq 100 this week and the market impact of SK Hynix's US listing.
