Key Takeaways:
Knowledge Atlas Technology (2513.HK) surged 8.986 percent on Wednesday as 25.6 million shares from a lock-up expiry hit the Hong Kong market.
"Nearly 70 percent of cornerstone investors have expressed intentions for long-term holdings," CLSA said in a report, citing company sources.
The 25.6 million shares represent 5.8 percent of the AI developer's issued capital. The stock has surged more than 1,200 percent since its listing. Short selling reached $67.30 million, or 0.397 percent of turnover.
The lock-up expiry comes as a record wave of IPO share lock-ups hits Hong Kong. Goldman Sachs estimated $274 billion worth of locked-up shares will be released over the next 12 months, a record-high volume. Historically, prices dip 4 percent to 7 percent within three to six months of release, Goldman analysts said.
Knowledge Atlas is considering designing its own chips, CLSA said, while Chinese authorities are reportedly considering restricting overseas users' access to the country's top AI models. The company recently launched GLM 5.2.
CLSA said a layered model system could be a viable solution for overseas expansion, under which frontier laboratories would keep their strongest models proprietary or provide them only to selected clients. The broker said formal disclosure of annual recurring revenue data by the company could become the next key event for investors.
The broader Hong Kong market has struggled. The Hang Seng Index is down 8.9 percent this year, while the average first-day return of Hong Kong IPOs in the first half of 2026 was 61 percent, according to EY.
Morgan Stanley analysts said secondary selling pressure will be most concentrated in July and September. "These events can create liquidity headwinds even when fundamentals remain intact," they wrote, adding that this was one of the key reasons for the bank to remain cautious on the Hong Kong market in the near term.
The stock's ability to absorb the lock-up expiry without significant selling pressure shows strong institutional demand. Investors will watch for formal ARR disclosure, which CLSA identified as the next event to watch for the stock.
This article is for informational purposes only and does not constitute investment advice.
