As the global AI market continues to cool down, Hong Kong tech stocks saw a collective drop to new lows since their listing last week. With a large proportion of them trading below their issue prices, the floating losses for cornerstone investors such as Hillhouse and Temasek have also expanded accordingly.

According to statistics from Yicai News, among the 40 A+H companies that completed H-share offerings since 2026, as of the close on November 6th, 34 of their Hong Kong stock prices have fallen below the issue price, accounting for about 85%. The areas most affected by this "underpricing" are concentrated in the AI hardware sector, covering sub-sectors such as optical modules, PCB, memory chips, and MLCC.

Calculated based on a six-month ban on trading, among the 21 companies whose shares were listed since June 5th and for which the lock-up period has not yet expired, 19 Hong Kong stocks have fallen below their issue prices, resulting in a total floating loss of approximately HK$25.16 billion. Among them, Zhongji Xuchuang (3308. HK) has seen a decline of 41.81% from its issue price, with 35 cornerstone investors incurring a floating loss of about HK$11.186 billion. This represents 44.5% of the total floating loss of the companies whose shares are not yet unlocked. The related shares will not be unlocked until the end of January next year.

Well-known institutions such as Hillhouse and Temasek that subscribed to Zhongji Xuchuang, Robotech (03757. HK), and Luxshare Precision (02475. HK) all suffered significant floating losses. In addition to institutional funds, listed companies in the industrial chain that subscribed to new Hong Kong stocks were also not spared. Listed companies such as Shenghong Technology (02476. HK), Lens Technology (06613. HK), Junzheng Shares (03223. HK), and Cambridge Technology (06166. HK) were also on the list of cornerstone investors, with some companies facing the dual pressures of their own stock prices falling below issue price and floating losses from subscriptions.

34 A+H stocks have broken below their issue prices, so why has subscribing to new shares in the Hong Kong stock market become a long-term task?

In the Hong Kong stock market of 2026 for IPO, A-share companies are definitely the main protagonists. From Hoya Group on January 12th to Dongshan Precision on October 28th, a total of 40 A-share companies completed H-share issuances, covering industries such as electronics, mechanical equipment, power equipment, basic chemicals, pharmaceuticals and biology, food and beverages, etc. Among them, there are 19 in the electronics industry, which is nearly half.

The current situation for newly listed stocks on the Hong Kong stock market (A+H shares) is that the issuance is very hot, but trading is very cold. As of the close on November 6th, 34 out of 40 companies had prices below their issue prices, accounting for about 85%; only six companies did not fall below their issue prices: Lanqi Technology (06809. HK), GigaDevice Technology (03986. HK), Guoen Technology (02768. HK), Transsion Holdings (02636. HK), Muyuan Foods (02714. HK), and Anker Innovation (00668. HK.

More than 12 companies have seen a decline of over 45% from their issue prices, with 8 of them experiencing a decline of over 50%: Dajin Heavy Industry fell by 67.48%, Puyuan Precision Electronics fell by 64.96%, Dingtai High-Tech fell by 63.41%, Wol Nuclear Materials fell by 60.41%, Zhaowei Electromechanical fell by 52.79%, Xiandao Intelligence fell by 51.40%, Robotech fell by 51.38%, and StarRing Technology fell by 50.65%.

By industry, 7 companies in mechanical equipment, 4 in power equipment, and 2 in communications all had their issue prices breached, with a breach rate of 100%. These newly listed stocks on the Hong Kong stock market that had their issue prices breached are almost all concentrated in the AI hardware industry chain. The PCB sector includes Dongshan Precision, Jingwang Electronics, Shenghong Technology, and Guanghe Technology; the optical module sector comprises Zhongji Xuchuang and Robotech; in the storage chip sector, there is Jiangbolong; in the wafer foundry sector, there is Jinghe Integration; the MLCC sector includes Sanhuan Group; and the precision manufacturing sector includes Lixun Precision, Lingyi Intelligent Manufacturing, and Longqi Technology.

Behind the mass underpricing of new shares is the fact that 2026 has been a bumper year for new share offerings in the Hong Kong stock market, with both the number of new shares issued and the amount of funds raised reaching new highs in several years. Moreover, the period for new share offerings coincides with the peak business season from June to July. On July 9th alone, four companies—Dingtai High-Tech, Sanhuan Group, Lixun Precision, and Puyuan Precision—listed on the same day; on July 30th, Zhongji Xuchuang completed its H-share issuance at a price of HK$980, which was the most expensive deal in the Hong Kong stock market this year.

After entering July, there was a negative feedback in the secondary market where funds "clustered" around technology stocks. The A-share Science and Technology Innovation Board and GEM continued to adjust, with popular technology stocks generally retracting by more than 60% from their year-highs. Zhongji Xuchuang's A-share price fell from 1416.88 yuan to 448.00 yuan on November 6, a retraction of 68.4%. Last week, the global AI hardware sector experienced another round of concentrated selling: U.S. tech stocks saw their largest single-day decline of the year, the Philadelphia Semiconductor Index tumbled sharply, and the AI hardware sectors in both Hong Kong and A-share markets also hit new lows simultaneously. The H-share prices of Zhongji Xuchuang, Luxshare Precision, Shenghong Technology, and Jiangbolong all reached their lowest levels since listing on November 6.

Even after a 41.8% drop, the price of 569.50 Hong Kong dollars for CITIC Xuchuang's H shares is equivalent to about 518 yuan in RMB, which is still higher than the 448.00 yuan for its A shares, indicating a premium of about 15.7% for H shares over A shares. This means that the issuance price of 980 Hong Kong dollars was not only "expensive at the time" but remains more expensive than A shares even today. Conversely, Dajin Heavy Industry's A shares are priced at 33.40 yuan, which is 70% more expensive than its H shares.

A high participation rate of cornerstone investors is another characteristic of this round of new share offerings in the Hong Kong stock market. In the case of Zhongji Xuchuang, 35 cornerstone investors subscribed for 50% of the global offering; for Dongshan Precision, 20 cornerstone investors also accounted for half of the shares, and for Jiangbolong, 14 cornerstone investors held 18.89% of the shares. The more shares are locked up by cornerstone investors, the fewer tradable shares there will be in the early stages of listing, making it easier for a small number of transactions to drive up the price.

The phenomenon of new shares breaking below their issue prices in bulk has already had an impact on the Hong Kong new share subscription market. On October 28th, Dongshan Precision went public, and its public offering in Hong Kong received only 0.52 times the number of subscriptions requested, while the international offering saw 3.17 times the demand. Ultimately, 20 cornerstone investors contributed HK$4.94 billion to subscribe for 56.8911 million shares, accounting for half of the total global offering, which allowed this nearly HK$9.9 billion issuance to proceed smoothly.

21 A+H shares not yet lifted from the ban: Cornerstone investors suffer a floating loss of approximately HK$25.16 billion

According to the rules of the Hong Kong Stock Exchange, the shares subscribed by cornerstone investors in H shares are subject to a six-month lock-up period. Taking Dajin Heavy Industry (01081. HK) which listed on June 5 as a benchmark, the cornerstone shares of companies that listed before that date have gradually been unlocked; for the 21 companies that listed after that, their cornerstone shares are still in the lock-up period.

Among these 21 companies, only Anker Innovation (00668. HK) is trading 1.44% above its issue price, and Transsion Holdings (02636. HK) is trading 4.82% above its issue price; the remaining 19 Hong Kong stocks all traded below their issue prices. According to a static calculation by Yicai News reporters using the formula "(closing price on November 6 - issue price) × total number of cornerstone shares held," the combined book loss for the cornerstone shares of these 21 companies amounts to approximately HK$25.16 billion.

The first to see its trading restrictions lifted was Dajin Heavy Industry. The stock was listed on June 5th, with a ban on sales lasting until December 4th, and it also experienced the largest decline in price from its issue price within the year. The issue price of the stock was HKD 66.40, and on November 6th, it closed at HKD 21.52, representing a decrease of 67.48%. As a company specializing in wind turbine towers, Dajin Heavy Industry's underperformance in terms of stock price is not directly related to the AI hardware chain, indicating that this round of market adjustments has affected more than just a single sector.

The 12 cornerstone investors of Dajin Heavy Industry hold a total of 42.2174 million shares, with a book floating loss of approximately HK$1.885 billion. The list includes Singapore's GIC, Hillhouse's HHLRA and HIM, CPE Juniper, UBS Asset Management Singapore, Taikang Life, ICBC Financial Management, China Post Financial Management, and institutions affiliated with Fullgoal. Among them, Singapore's GIC subscribed for 9.4344 million shares, with a single-family floating loss of about HK$423 million.

Zhongji Xuchuang has been a star project in this year's Hong Kong stock market. The cornerstone investors made the largest investment, yet they also suffered the highest floating losses. A total of 35 cornerstone investors subscribed for 27.2494 million shares, resulting in a book floating loss of approximately HK$11.186 billion. The floating loss of one company alone accounts for 44.5% of the total floating losses of the 21 stocks.

The cornerstone investors in the Hong Kong stock issuance of Zhongji Xuchuang include well-known institutions such as Temasek, Hillhouse Capital, BlackRock, J.P, Morgan, as well as companies like Alibaba, Tencent, and Chow Tai Fook. Among them, Hillhouse Capital's HHLRA subscribed for 2.3696 million shares, resulting in a floating loss of approximately HK$973 million; BlackRock subscribed for 1.9746 million shares, with a floating loss of about HK$811 million; Alibaba and Tencent each suffered a floating loss of around HK$162 million. The lock-up period for these shares will last until the end of January next year.

The second-highest floating loss among cornerstone investors is of Lixun Precision (02475. HK). With a 22.3% underpricing, it resulted in a floating loss of HK$264.5 million for 33 cornerstone investors. Hillhouse Capital's HHLR subscribed for 26.6224 million shares, suffering a floating loss of HK$37.8 million; Temasek experienced a floating loss of HK$35.2 million.

Several AI hardware new stocks listed after September also experienced astonishing declines. On September 29th, Robotech's stock price fell below its issue price by 51.38%. The stock was issued at HKD 436 per share, and its latest closing price was HKD 212 per share. A total of 17 cornerstone investors subscribed for 4.17995 million shares, resulting in a floating loss of approximately HKD 896 million. Among them, Temasek subscribed for 809,350 shares, incurring a floating loss of about HKD 181 million; IvyRock (Ivy League) subscribed for 539,550 shares, with a floating loss of about HKD 121 million.

On September 8th, Jiangbolong (09976.HK), a storage module manufacturer that went public on the market, had an issue price of HKD 236 and closed at HKD 135.80, representing a decline of 42.46%. Transsion International subscribed for 830,800 shares, incurring a floating loss of approximately HKD 0.83 million. Lenovo Group, Lens Technology (Hong Kong), and the Hong Kong entity under Beijing Junzheng each subscribed for 332,300 shares, each suffering a floating loss of about HKD 0.33 million.

Gao Lin Group has shown a pattern of participating in large quantities and incurring floating losses in this year's Hong Kong stock market new issues. Apart from Zhongji Xuchuang, HHLR participated in the subscription of 618,600 shares of Dingtai High-Tech, incurring a floating loss of approximately HK$149 million; in Dajin Heavy Industry, HHLRA and HIM each subscribed for 2.9482 million shares, resulting in a total floating loss of about HK$264 million; in Jinghe Integration (02249.HK), they subscribed for 3.6394 million shares, with a floating loss of about HK$27 million. Including the floating losses from the subscriptions of Zhongji Xuchuang and Luxshare Precision, Gao Lin's total book floating loss from these 5 new shares amounts to HK$179 million.

Judging from the unlocking schedule, on December 4th, Dajin Heavy Industry's shares will be unlocked first. Within December, Xingyuan Materials (06067.HK) and Shengbang Shares will also have their restrictions lifted one after another. In early January next year, Puyuan Jingdian, Jinghe Integration, Sanhuan Group, Dingtai High-Tech, etc. will see their shares unlocked. By the end of January, Zhongji Xuchuang's shares will be unlocked, and in March next year, Jiangbolong and Robotech's shares will be unlocked. During the lock-up period, any floating losses remain on the books. The pressure to reduce holdings after the restrictions are lifted and the restoration of valuation will still be key areas of observation.

Listed companies in the industrial chain form groups to participate in new share offerings, resulting in losses for both themselves and their investment positions

In addition to professional institutions, a number of listed companies along the industrial chain have also participated in this round of H-share issuance as cornerstone investors, forming a mutual holding arrangement between upstream and downstream entities. During the phase of deflating the bubble in the technology sector, these industrial capital investors are also in a state of floating losses in their subscription positions.

Shenghong Technology (02476. HK) is a typical example. The company's H shares were listed on April 21st at an issue price of HKD 209.88, and by November 6th, they closed at HKD 108.40, representing a 48.35% discount from the issue price. The cornerstone shares were unlocked on October 21st.

Shenghong Technology's Hong Kong entity subscribed for 618,600 shares of PCB drill needle manufacturer Dingtaigaoke. At the latest closing price, this investment has a book loss of approximately HK$149 million. Shenghong Technology is a customer of Dingtaigaoke, and during the significant correction in the PCB sector, all links in the industrial chain were unable to avoid a sharp decline; accordingly, Shenghong Technology's investment position also retreated in tandem with its own stock price.

Two A-share listed companies appear on the Jiangbolong cornerstone list. Lens Technology (06613. HK) subscribed for 332,300 shares, incurring a floating loss of approximately HK$0.33 million; Junzheng Shares (3223. HK, namely Beijing Junzheng), through its Hong Kong entity, also subscribed for 332,300 shares, with a floating loss of about HK$0.33 million.

In Robotech's cornerstone investor list, Cambridge Technology (06166. HK), a fiber module manufacturer, subscribed for 179,850 shares, resulting in a floating loss of approximately HK$0.40 million. Cambridge Technology's H shares were listed on October 28, 2025, and their current stock price is 24.2% below the issue price. In Puyuan Precision Electronics' (00537. HK) cornerstone investor list, the Hong Kong entity under Sungrow Power Supply (300274. SZ) subscribed for 681,800 shares, incurring a floating loss of about HK$0.20 million. Currently, Puyuan Precision Electronics' H shares are trading at a significant discount of 64.96% below the issue price.

Overall, among the listed companies participating in this new share issuance, some of their H shares are also trading below their issue prices, creating additional pressure on their investment positions relative to their stock prices. Although there is no inevitable causal relationship between the two, they both reflect a common situation where capital in the industrial chain participates in pricing at market highs and then simultaneously suffers from price corrections. According to Yicai, the recent concentrated underpricing of technology stocks in the Hong Kong market is due not only to the expansion of supply in the Hong Kong market itself and the global valuation correction, but also to the fact that some of these stocks were priced too high during periods of high industry prosperity.