2026 Hong Kong Market Faces Unlocking Peak: HKD 1.6 Trillion In Restricted Shares To Be Released, How Will The Market Respond?

The Hong Kong equity market is set to confront a substantial wave of lock‑up expirations in 2026, with approximately HKD 1.6 trillion worth of restricted shares scheduled for release over the year. Monthly analysis indicates that six months will each see more than HKD 100 billion unlocked, and September is projected to be the apex, when HKD 530.89 billion (about 44.62 billion shares) will become tradable, representing 32.6 percent of the annual total. Puyin International observes that this volume equates to roughly 31 percent of the aggregate market capitalization of the affected issuers and 113 percent of their free‑float market value, implying significant liquidity pressure for the Hong Kong market during peak months.

The timing of unlocks is particularly relevant for growth‑oriented sectors. The core growth segments of the Hong Kong market—information technology, consumer discretionary and healthcare—are expected to concentrate their unlocking activity in March and April, creating a period of heightened supply that warrants close investor attention. The robust rebound in Hong Kong’s IPO market in 2025, which raised HKD 242.64 billion (approximately USD 31.22 billion) and ranked first globally, has contributed to the scale of next year’s unlocking cycle.

Puyin International’s study of 766 newly listed Hong Kong companies between 2018 and 2025 reveals distinct industry‑level responses to lock‑up expirations. Certain sectors, such as telecommunications and software services, tend to price in unlocking expectations in advance, with share prices stabilizing or recovering after the event. Other industries, notably semiconductors and automobiles, often experience relatively muted pre‑unlock performance followed by pronounced selling pressure once restrictions lapse. A third group, including industrial engineering, commercial transport, support services and construction, shows limited sensitivity to unlocking events, with comparatively modest price movements.

Company size also shapes the market impact. Smaller capitalizations—defined here as market values below HKD 10 billion—are most vulnerable to liquidity shocks, with a majority underperforming the Hang Seng Index in the months surrounding unlocks and delivering negative average returns. Mid‑cap issuers (HKD 10–80 billion) exhibit milder effects and frequently record positive returns across the same windows. Large‑cap companies (above HKD 80 billion) often face concentrated selling pressure in the quarter before unlocks, but prices typically stabilize quickly thereafter.

At the individual stock level, the degree of selling pressure depends on the interaction of three factors: the proportion of shares being unlocked, the industry’s inherent volatility, and the issuer’s fundamental quality. Historical episodes demonstrate that very high unlock ratios can precipitate severe declines; for example, SenseTime experienced a cumulative share‑price drop exceeding 50 percent around the unlocking of 69 percent of its equity. High‑valuation growth names in software, hardware and semiconductor segments have shown greater post‑unlock volatility, whereas traditional sectors such as food and beverage and real estate have tended to be more resilient. Market participants note that industry leaders with solid fundamentals and clear profitability profiles, such as Meituan and CATL（宁德时代）, often see short‑term weakness from unlocks present medium‑ to long‑term buying opportunities, while issuers with unproven business models and elevated valuations face materially higher risk when large proportions of shares are released.

Puyin International’s screening of the next 12 months identifies the 30 Hong Kong issuers with the largest unlocking market values. Zijin Mining International (02259.HK) ranks highest, with an unlocking market value of HKD 40.66 billion, equivalent to 92 percent of its free‑float shares. Other prominent names, including Mixue Group (02097.HK) and MINIMAX (00100.HK), each have unlocking values exceeding HKD 5 billion. Concentrated releases among these issuers could exert direct pressure on market liquidity and individual share prices. From the perspective of unlock ratios, a separate list of 30 companies shows firms such as Unisound (09678.HK), Shanghai Auntie (02589.HK) and Minglue Technology (02718.HK) with proportions above 90 percent, indicating a potential for substantial free‑float expansion and elevated sell‑down risk.

The rising share of restricted stock among newly listed Hong Kong companies reflects structural shifts in the IPO market. A+H listings have become a dominant source of new issuance, supported by streamlined approval processes and a narrowing A‑H premium. Many mainland industry leaders that list in Hong Kong bring stable operating cash flows and established financing channels; their primary objectives increasingly center on building cross‑border capital platforms, attracting international investors and advancing global strategies.

From an investment standpoint, the end of lock‑up periods will create differentiated opportunities and risks. For fundamentally robust companies, any irrational price declines triggered by unlocking events may offer attractive entry points for medium‑ to long‑term investors. Market participants should monitor shareholder reduction notices, liquidity conditions and underlying business metrics closely to assess the likelihood and magnitude of post‑unlock selling. Such vigilance will be essential to evaluate how the substantial release of restricted shares will influence market dynamics and individual valuations in 2026.