Nearly HKD 200 billion! Before the end of the year, Hong Kong stocks will face the test of a "lock-up release frenzy."

The Hong Kong stock market is facing profit-taking pressure, with approximately HKD 193.8 billion of tradable shares set to be released due to the expiration of share lock-ups concentrated before the end of the year.

From this Wednesday until the end of the year, 28 companies that went public in Hong Kong over the past year will see their shares unlocked, as the selling restrictions for early investors, management, and controlling shareholders expire. Based on Tuesday's closing price, the total value of these unlocked shares amounts to USD 24.9 billion.

The wave of unlocks coincides with a rise in global risk aversion and weakening market momentum, adding pressure to Hong Kong stocks. Although the Hang Seng Index has still risen 29% this year, it is experiencing its largest weekly decline in a month, with uncertainties surrounding Federal Reserve policy also dampening market sentiment.

(The Hang Seng Index has risen 29% this year)

The first vice president of RenYun Family Office (Hong Kong) Limited, Huang Ruiwen, stated:

The expiration of lock-ups is a clear risk factor facing Hong Kong stocks before the end of the year. After a significant rise this year, it is normal for investors to take profits, both at the individual stock level and in the overall market.

IPO Boom Boosts Unlock Scale

The Hong Kong IPO market is experiencing its most active year in four years. According to Bloomberg Industry Research, the total fundraising amount is expected to exceed USD 40 billion by 2025.

This round of IPO enthusiasm has directly increased the scale of unlocks at the end of the year.

Data compiled by Bloomberg shows that the 28 companies facing unlocks have seen their H-shares rise an average of 95% since their listing. Among them, Nanjing Tairui Biotechnology Co., Ltd. leads this year's gains, soaring approximately 1440%.

The concentration of new listings is injecting vitality into the market, but it also means that a large number of locked shares will enter circulation in the short term. The timing of these unlocks is sensitive, occurring as market momentum weakens.

H-Shares with Premium Face Greater Pressure

Kenny Ng, an international strategist at China Everbright Securities, pointed out that companies listed in both A and H shares, where H shares are at a premium, are expected to face particularly significant downward pressure.

Currently, dual-listed stocks that maintain H-share premiums include Chinese battery giant CATL and Jiangsu Hengrui Medicine.

For such companies, the valuation advantage of H shares relative to A shares may prompt shareholders of unlocked shares to prioritize reducing their positions in Hong Kong stocks, thereby exacerbating the downward pressure on H shares.

This structural pressure highlights the differentiated impact of the unlock wave on different types of listed companies, and investors need to pay attention to the listing structure and valuation differentiation of individual stocks