The Hang Seng TECH Index has experienced a decline of over 10% year-to-date in 2026. However, the two best-performing new listings on the Hong Kong stock market this year have been AI large model companies: KNOWLEDGE ATLAS (02513) and MiniMax. Since their initial public offerings, their stock price gains have ranked first and second among all 2026 Hong Kong IPOs.
A key issue is that these two companies are not yet constituents of the Hang Seng TECH Index, primarily due to their short listing history not meeting the inclusion criteria. Currently, both KNOWLEDGE ATLAS and MiniMax are expected to pass the index's June review and be formally included on June 8, 2026, with a combined index weighting estimated between 5% and 7%.
Analysts at Morgan Stanley have calculated that if KNOWLEDGE ATLAS and MiniMax had been included in the index on their first day of trading, the index's year-to-date decline would have narrowed from -12.6% to approximately -7.6%.
Nevertheless, a significant test will come with the wave of share lock-up expiries starting in July. For KNOWLEDGE ATLAS, cornerstone investors will see a 5.83% lock-up expire. For MiniMax, nearly 50% of shares held by pre-IPO shareholders and cornerstone investors will become freely tradable. This will substantially increase the floating supply, posing a severe challenge to the current scarcity premium reflected in their share prices.
Has the Hang Seng TECH Index's composition become skewed? The index's double-digit decline this year appears superficially linked to Middle East geopolitical tensions and a global reduction in risk appetite. Analysis of the index's current structure reveals that e-commerce companies (including Alibaba, Meituan, JD.com, Trip.com, and Tongcheng Travel) account for 25.4% of the index weight. The automotive/new energy vehicle sector (including BYD, Xiaomi, NIO, XPeng, Li Auto, and Leapmotor) accounts for 25.1%. Combined, these two sectors represent over half of the index's weighting. In other words, the index is heavily weighted towards consumer and mobility sectors. The ongoing absence of ByteDance from the index also remains a factor.
The analyst's hypothetical scenario suggests that including KNOWLEDGE ATLAS and MiniMax earlier could have reduced the index's losses by about 5 percentage points this year. This calculation is not merely speculative; it points to an imminent reality: these two companies are set to join the index soon.
On June 8, 2026, KNOWLEDGE ATLAS and MiniMax are expected to be formally included in the Hang Seng TECH Index. The index maintains a fixed roster of 30 constituents, with an individual weight cap of 8%. New inclusions necessitate the removal of existing members. Based on the rules, non-constituents must rank 24th or higher to be eligible for inclusion. The current lowest-weighted constituents, Kingdee International and Kingsoft, are highly likely to be removed.
Direct inclusion impact involves mandatory buying from passive funds tracking the index. Data indicates that ETFs and other passive products tracking the Hang Seng TECH Index currently manage approximately $25 billion in assets. Based on the estimated 5%-7% combined weighting, KNOWLEDGE ATLAS and MiniMax could see combined passive inflows between $1.25 billion and $1.75 billion.
Beyond the Hang Seng TECH Index, a potentially larger source of capital is the Southbound Stock Connect scheme. Morgan Stanley anticipates KNOWLEDGE ATLAS will be included in Stock Connect simultaneously on June 8, 2026. MiniMax, however, due to its Weighted Voting Rights (WVR) structure, must meet additional criteria—including being listed for at least six months and twenty trading days, maintaining a minimum average market capitalization of HK$20 billion over the past 183 trading days, and achieving a minimum total trading turnover of HK$6 billion over the same period. Consequently, MiniMax's inclusion is projected for August 6, 2026, at the earliest. This timeline difference reflects stricter governance scrutiny applied by HKEX to companies with dual-class share structures.
Historical analysis of major internet and tech companies added to Stock Connect shows that, on average, Southbound holdings reached about 9% of the company's free float within six months of inclusion. For companies with smaller free floats, this percentage tends to be higher. The report provides forecasts under two scenarios:
Base Scenario (Southbound holdings reaching 8%-9% of free float): - MiniMax: Estimated cumulative net Southbound inflows of approximately HK$18.4 billion over 180 days post-inclusion, equivalent to about 12.8 days of its average daily turnover as of April 2026. - KNOWLEDGE ATLAS: Estimated cumulative net Southbound inflows of approximately HK$18.6 billion, equivalent to about 10 days of its average daily turnover.
Optimistic Scenario (Referencing small-float IPOs like Horizon Robotics, with Southbound holdings rising to ~20%): - MiniMax: Estimated cumulative net Southbound inflows of approximately HK$43.4 billion, equivalent to about 30 days of average daily turnover. - KNOWLEDGE ATLAS: Estimated cumulative net Southbound inflows of approximately HK$43.9 billion, equivalent to about 23.5 days of average daily turnover.
Combined, Southbound inflows could reach around HK$37 billion in the base scenario and approach HK$88 billion in the optimistic scenario. Given the extreme scarcity of comparable investment targets in both Hong Kong and A-share markets, the inclusion of these two stocks is expected to support their share prices and valuations, potentially boosting broader market sentiment and participation from both institutional and retail investors.
While the inflow expectations are optimistic, the impending lock-up expiries present a significant counterbalance. Both companies currently have极小 float sizes: KNOWLEDGE ATLAS's true free float is only about 2.67%, while MiniMax's is approximately 5.44%, with over 90% of shares still under lock-up. This means current share prices are determined by very limited supply, incorporating a significant liquidity premium.
Two key dates present critical tests: First Test: Around July 7/8, 2026 (approximately six months post-IPO): Lock-ups expire for KNOWLEDGE ATLAS's cornerstone investors (5.83% of shares). For MiniMax, lock-ups expire for approximately 44.29% of pre-IPO shareholders (6-month lock-up) and 5.34% for cornerstone investors, totaling nearly 50% of shares. The number of freely tradable shares will suddenly increase several-fold, fundamentally altering the supply-demand balance for the first time.
Second Test: Around January 2027 (approximately 12 months post-IPO): This primarily affects KNOWLEDGE ATLAS, as lock-ups expire for non-controlling shareholders holding over 60% of shares, potentially leading to concentrated selling pressure from early investors and employees.
At that point, market pricing logic will likely shift from "scarcity premium" back to fundamentals. Metrics such as revenue growth rate, pace of loss reduction, and commercial deployment success will become critical hard indicators. Based on current financial data, both companies face significant pressure. KNOWLEDGE ATLAS reported H1 2025 revenue of 191 million yuan against R&D expenses of 1.594 billion yuan, implying approximately 8 yuan spent on R&D for every 1 yuan of revenue. MiniMax reported revenue of $53.44 million for the first nine months of 2025 against R&D expenses of $180 million, equating to about $3.37 spent on R&D for every $1 of revenue.
The listings of KNOWLEDGE ATLAS and MiniMax are not isolated events but signal a broader structural shift in the Hong Kong IPO market. Total IPO fundraising in Hong Kong for 2026 year-to-date has reached HK$139 billion, approximately 50% of the total for the entire year of 2025. Within this, the Information Technology sector has raised HK$54 billion, accounting for 39% of total fundraising. This not only exceeds the HK$40 billion raised by the IT sector in all of 2025 but also represents a significant increase from 2025's 14% share. The semiconductor sector is particularly notable, seeing its share of total fundraising rise from 3% in 2025 to 21% in 2026.
Looking at the IPO pipeline, among approximately 390 companies currently in the queue, Information Technology firms account for about 43%, Healthcare for 22%, and Consumer Goods for 13%.
This shift is underpinned by clear policy support. In September 2024, HKEX and the SFC lowered the minimum market capitalization thresholds for listing under Chapter 18C (Specialist Technology Companies). The threshold for commercialized companies was reduced from HK$6 billion to HK$4 billion, and for pre-commercial companies from HK$10 billion to HK$8 billion, valid for three years. Concurrently, HKEX and the SFC launched the "Technology Enterprise Channel" (TECH), providing a dedicated fast-track listing route and confidential filing options for AI and large model companies.
On the fiscal policy front, the 2025-26 Budget allocated HK$10 billion to establish an Innovation and Technology Industry-focused Fund and HK$1 billion to set up the Hong Kong Artificial Intelligence Research Institute. The 2026-27 Budget further established an "AI+ and Industrial Development Strategy Committee," positioning AI as a core industry.
Hong Kong has become the first global market to host major large model company IPOs, and this pipeline continues to expand.
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