Key Takeaways:
MINIMAX-W slumped as much as 9.8% and Knowledge Atlas dived 8.5% after lock-up expiries triggered share placements and convertible bond issuances.
"The underperformance of some new listings likely reflects a more cautious market backdrop and broader uncertainties surrounding global trade and geopolitics," said Chokwai Lee, a director at Morningstar.
MINIMAX-W (00100.HK) fell as low as HKD 268.2 from its previous close, with turnover reaching HKD 1.3 billion. The company announced a proposed share placement alongside the issuance of zero-coupon guaranteed convertible bonds, with the two fundraising exercises not conditional upon each other. The combined proceeds were expected to exceed HKD 16 billion. Knowledge Atlas (02513.HK) dropped to HKD 1,859 on turnover of HKD 3.915 billion after unveiling its own share placement.
The simultaneous fundraising by two of Hong Kong's largest AI companies raises dilution concerns that could weigh on the sector. MiniMax Group had plunged as much as 18% a day earlier as its first large post-listing lock-up period expired, freeing up roughly 45% of its issued share capital for public trading.
Knowledge Atlas, also known as Zhipu AI, launched a roughly $4 billion Hong Kong share placement on Wednesday. The stock had climbed 11.3% on Thursday before Friday's decline. JPMorgan recently raised its price target on Knowledge Atlas to HKD 2,000 while cutting MINIMAX-W to HKD 300, citing a winner-takes-all trend in open-weight AI commercialization.
Luxshare Precision Industry, an Apple supplier that makes parts for smartphones, laptops and data centers, led losses among IPO debutants in Hong Kong on Thursday after raising HK$24.27 billion in the city's biggest listing this year. The stock dropped as much as 9.6% to HK$57.2 compared with its offer price of HK$63.28. Cornerstone investors in Luxshare's listing included Temasek-linked funds, GIC, and the Abu Dhabi Investment Authority.
Chinese technology and advanced manufacturing firms have been rushing to list in Hong Kong to fund expansion and research in electronics, chips and artificial intelligence. A record wave of lock-up expirations after a strong first half for new listings is weighing on the market. Most of the six other Hong Kong debutants on Thursday also received lukewarm welcomes, with electronic test equipment maker Rigol and circuit-board tool maker DTech sliding below their offering prices.
The declines put both stocks under pressure as investors reassess valuations against a wave of supply. MINIMAX-W and Knowledge Atlas will need to demonstrate clear AI monetization paths to regain investor confidence, with both companies facing increased scrutiny over their capital allocation strategies.
This article is for informational purposes only and does not constitute investment advice.
