UNISOUND listed on the Hong Kong Stock Exchange on June 30, 2025, at an offer price of HK$205 per share. Following its debut, the company's share price generally exhibited a pattern of surging initially before retreating. During this period, the company completed three separate placement transactions, raising a total net amount of approximately HK$880 million in follow-on financing, which has already surpassed the amount raised in its initial public offering. However, these multiple rounds of fundraising have not effectively improved its operational performance, as the company's losses have continued to widen. Influenced by multiple factors, both the company's share price and market capitalization have seen significant declines, and the market continues to closely monitor its ability to deliver on its financial performance.
Plummeting Nearly 80% from a Peak of HK$856 to HK$176
The trajectory of UNISOUND's share price can be considered a classic case of extreme volatility among Hong Kong-listed new stocks.
On its first trading day, fueled by speculation over its potential inclusion in the Stock Connect program, the stock price surged from the IPO price of HK$205 to close at HK$296.4, marking a first-day gain of 44.6% and pushing its market capitalization above HK$21 billion. Driven by expectations of its inclusion in the Southbound Stock Connect effective September 8, speculative capital continued to pour in. The stock price reached its historical highest closing price of HK$856 per share on the day before the inclusion took effect, representing a staggering 318% surge from the IPO price and briefly pushing its market cap above HK$60.9 billion.
However, as the Stock Connect inclusion officially commenced, early-positioned capital began large-scale profit-taking. On the inclusion day itself, the stock price plummeted 18.2% in a single session to close at HK$610.5. Over the next nine trading days, the price continued its steep decline, touching a low of HK$432, representing a near-50% drop from the peak in less than two weeks. Following this post-inclusion crash, the share price rebounded to a range between HK$430 and HK$500 from late 2025 to early 2026. But on January 28, 2026, the stock experienced an anomalous single-day surge of 73.8% amid high volatility, before entering a prolonged downtrend.
The company repeatedly finalized placement prices when the share price was at periodic highs, with these placement activities consistently weighing on the stock's performance. On January 15 and February 2, 2026, when the share price was at elevated levels, the company successively set prices for two placements and initiated the related processes. By the time these two placements were settled, the share price had fallen 24.3% and 22.5%, respectively, from the pricing dates. After a brief rebound in mid-February, the trend weakened again. On May 27, as the stock rebounded to HK$284.6, the company launched its third placement. Subsequently, the price declined steadily, closing at HK$210.2 on June 4, the settlement date, marking a cumulative drop of 24.1% from the closing price on the pricing date.
As of June 9, 2026, the company's closing price had fallen to HK$176, not only breaching its IPO offer price but also representing a cumulative plunge of 79.4% from its historical peak closing price of HK$856 on August 28, 2025. The company's current total market capitalization is approximately HK$13.1 billion.
A Series of Share Placements with May's Fundraising Setting a Record
Amidst the significant share price volatility, UNISOUND initiated multiple share placements to replenish capital.
The first placement in January 2026 saw the company issue shares at approximately HK$350 per share, raising a net amount of about HK$192 million, representing a discount of roughly 16% to the closing price before the announcement. Guotai Junan Securities acted as the placing agent. For the second placement in February 2026, shares were placed at approximately HK$276.6 each, raising a net amount of about HK$307 million, with the discount widening to approximately 17.68%. Guotai Junan Securities remained the placing agent.
The third placement launched on May 28 was the most significant of the three fundraising efforts. This placement involved the issuance of 1.7 million new shares at HK$228.00 per share, raising a net amount of approximately HK$381 million. The scale was 1.2 times and 1.9 times that of the first and second placements, respectively. More notably, the placing price represented a discount of 19.89% to the closing price the day before the announcement, significantly higher than the discounts for the prior two placements, indicating a weakened negotiating position for the company as it sought funds urgently.
Hefty R&D Expenditure Drains Capital Amidst Major Model Initiatives
The company provided a clear strategic narrative for the use of proceeds from the three placements. January's funds were allocated for upgrading the "Atlas AI Infrastructure" and the "Cloudwise Brain." February's proceeds were intended for the "Shanhai·Atlas" integrated intelligent computing base. The HK$381 million raised from the May placement targeted more ambitious goals: training a new generation of "U-Series" trillion-parameter intelligent native base large language models, constructing a global large language model Token factory and deploying Token overseas business, as well as sales promotion and market deployment.
As a technology company, it has maintained a high level of research and development investment. R&D expenses increased from RMB 286 million in 2023 to RMB 381 million in 2025. Although the R&D expense ratio as a percentage of revenue has diluted somewhat with revenue expansion, it remains at a high level above 30%. Given the industry's characteristic of high R&D investment, coupled with other costs like sales and administration, the company's near-term profitability remains under pressure.
The company's losses have continued to expand. For the full year 2025, it reported a net loss of RMB 327 million, with an adjusted net loss attributable to owners of RMB 342 million. Compared to its 2025 revenue of RMB 1.21 billion, the net loss ratio narrowed to 27.2%. The cash flow situation is also concerning. In 2025, net cash outflow from operating activities was as high as RMB 213 million, and investment activities also resulted in a net outflow of RMB 86 million. This indicates that its core business has yet to achieve self-sustaining "blood-making" capability, with all R&D and operations reliant on external financing for support.
Questions Arise Over Use of Repeatedly Raised Funds
More worryingly for the market, the utilization progress of the proceeds from the company's first two placements has been extremely slow, raising investor doubts about the authenticity of the stated fund uses.
As of April 30, 2026, just before the third placement, of the approximately HK$192 million raised in the January placement, only about HK$81 million had been used, leaving a substantial 55.7%, or about HK$110 million, idle. Notably, the planned use of over HK$75 million for the "Regional AI Base and Application Platform" and "Industry AI Intelligent Agent Products" had a utilization rate of precisely zero.
The utilization of the approximately HK$307 million raised in the February placement also progressed slowly, with only about HK$7 million used, meaning over 97%, or about HK$300 million, remained untouched. The planned use of approximately HK$100 million for the "Shanhai·Shenzhi" professional intelligent agent core had a utilization rate of only 3%, while funds allocated for the development of the "Shanhai·Jianwen" edge-side multimodal intelligent agent and intelligent health management To C products both had utilization rates of less than 1%.
This pattern of "launching new urgent fundraising while previous massive fundraising remains largely unused" inevitably leads the market to question: Is the company's strategy too forward-looking, requiring continuous capital reserves for the future, or are current business developments falling short of expectations, preventing previous funds from being deployed as planned?
Stock Connect Benefits Exhausted, Southbound Capital Deeply Trapped
UNISOUND's fall from its HK$856 peak to HK$131 means that the majority of southbound capital that purchased shares after the Stock Connect inclusion took effect on September 8, 2025, is now deeply trapped. The closing price on the first day of inclusion was HK$610.5, while the current price is only HK$176, a drop of 71.2%. Even investors who bought at the perceived low around HK$215 to HK$220 in January 2026, following the inclusion, and factoring in the dilution from the three placements, have found it difficult to realize profits.
This rollercoaster ride, from being the center of attention to a state of disarray, has not only severely impacted secondary market investors but also exposed the fragility of share price speculation models that rely on "rushing into Stock Connect" and short-term pumping for arbitrage.
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