Morgan Stanley warns of a wave of lock-up expirations in Hong Kong’s stock market, with domestic AI leaders Zhipu experiencing a sharp near-30% plunge, signaling mounting liquidity pressures across Asia-Pacific markets. The Hong Kong market is entering an unprecedented wave of IPO lock-up expirations. Morgan Stanley anticipates significant selling pressure in July and September, as the sudden influx of tradable shares—even with stable fundamentals—could create liquidity headwinds. Goldman Sachs estimates that approximately $274 billion in restricted shares will unlock over the next 12 months, setting a new record high. Zhipu has emerged as the most visible example of this unlocking pressure. According to HKEX filings, approximately 25.68 million shares held by cornerstone investors are subject to a lock-up expiration on July 7, meaning they become freely tradable starting July 8—accounting for about 5.8% of the company’s total shares. Since its January IPO at HK$116.2, Zhipu’s stock had surged more than 12-fold; its extremely low free float had amplified both valuation and volatility. On July 17, Zhipu closed down approximately 28.5%, posting the steepest decline among Hong Kong’s AI sector stocks that day. Beyond lock-up expirations, Zhipu faces internal and external challenges. Following the release of Kimi K3 by Moonshot AI (@Kimi_Moonshot), market participants have begun reassessing Zhipu’s GLM-5.2 competitive positioning. This is compounded by the company’s recent discounted issuance of approximately 19.78 million additional shares, significantly increasing near-term selling pressure. Nevertheless, compared to Minmax, Zhipu’s stock remains close to its IPO price.