On June 22, 2026, Hong Kong stocks witnessed a dramatic "AI legend" rally. ZHIPU surged over 42% intraday, peaking at HKD 2,980 per share, with a corresponding market cap of HKD 1.27 trillion. By the close, gains had pared back to 15.09%, settling at HKD 2,410 per share and a market cap of HKD 1.07 trillion. This company, listed for less than half a year, started at an IPO price of HKD 116.2, marking a cumulative increase of over 1,900%.
However, the frenzy was short-lived. On June 23, ZHIPU opened down roughly 14%, temporarily quoted at HKD 2,060 per share, with intraday losses widening to over 25%. That same day, Hong Kong’s AI large model stocks collectively weakened, with MiniMax-W also falling more than 3%.
From HKD 2,980 to HKD 2,060 in under 24 hours, what drove this nearly HKD 1,000 price swing?
A Sharp Rally Followed by a Pullback: Why Did Market Sentiment Shift So Quickly?
The surge on June 22 wasn’t an isolated event. Between June 10 and June 18, ZHIPU’s share price doubled in just about a week. On June 17, ZHIPU released and open-sourced its next-generation flagship large model, GLM-5.2, which scored 51 points on the Artificial Analysis composite ranking, topping the open-source model list. GLM-5.2 focuses on "long-range tasks," offering 1M lossless context and ranked first globally among available models in the Code Arena blind test.
This technical breakthrough directly fueled market enthusiasm. On June 18, Elon Musk commented on social media that China could catch up with top-tier AI levels by Q1 2027. ZHIPU’s founder Tang Jie responded, "It won’t take that long." This exchange quickly went viral, pushing attention on ZHIPU’s technological prowess to a peak.
With multiple positive catalysts resonating, ZHIPU nearly doubled in five trading days. But such rapid gains meant a large amount of profit-taking. Analysts noted that ZHIPU and MiniMax had seen massive increases recently, prompting many investors to cash out. When the stock encountered selling pressure at the HKD 2,980 peak and closed at HKD 2,410, trend-following funds and short-term traders began to exit.
Trillion-Dollar Market Cap vs. HKD 700 Million Revenue: Can Fundamentals Support the Valuation?
To understand the deeper logic behind the decline, we must first examine ZHIPU’s fundamentals at its trillion-dollar valuation.
According to ZHIPU’s 2025 annual report, the company achieved annual revenue of HKD 724 million, up 131.9% year-over-year. However, net losses reached HKD 4.718 billion, with adjusted net losses at HKD 3.182 billion. R&D expenses totaled HKD 3.18 billion, up 44.9%.
At a market cap of HKD 1.07 trillion and annual revenue of HKD 724 million, the price-to-sales ratio falls between 1,300 and 1,600 times. For comparison, Anthropic’s primary market valuation is about USD 96.5 billion with a price-to-sales ratio of roughly 20, and OpenAI is valued at USD 85.2 billion with a price-to-sales ratio of about 34. The highest-valued AI stock on China’s A-share market, Cambricon, has a price-to-sales ratio of about 110.
A company with HKD 700 million in annual revenue and HKD 4.7 billion in losses, yet a market cap exceeding HKD 1 trillion—clearly, the market isn’t pricing current profitability, but rather the scarcity of a "China AI infrastructure" ticket. The problem is, when the gap between valuation and fundamentals grows extreme, any marginal change can trigger sharp repricing. The decline on June 23 was, in part, a collective reassessment of this gap.
Scarcity Premium Is Fading: AI Valuation Logic Is Being Reconstructed
The core logic behind ZHIPU’s valuation surge was the "scarcity premium." UBS analysts break this down into three factors: the scarcity of listed global model companies, the pre-lockup period, and limited liquidity.
But this logic is now unraveling on multiple fronts. First, global AI IPO supply is expanding—Anthropic and OpenAI have both confidentially filed for IPOs, planning to go public within the year. Overseas mature AI firms provide clear valuation benchmarks, with their commercialization and manageable losses contrasting sharply with domestic firms’ ongoing heavy losses. Second, China’s large model IPO window is opening, with several leading companies applying for Hong Kong or STAR Market listings, meaning AI stocks will soon be much more plentiful in the secondary market. Third, cloud and internet giants are continuously opening up their self-developed large models, narrowing the technological differentiation barriers for independent large model companies.
When "scarcity" is no longer scarce, the underlying logic supporting high price-to-sales multiples starts to weaken. Capital markets realize that scarcity only represents short-term trading opportunities and cannot mask long-term operational shortcomings. ZHIPU’s decline on June 23 is a concentrated reflection of this shift in valuation logic.
July Lockup Expiry Looms: Free Float Set to More Than Double
If the change in valuation logic is a structural factor, then the upcoming July lockup expiry is a direct liquidity pressure.
According to HKEX filings, ZHIPU will see its first batch of cornerstone investor shares unlocked on July 8, 2026, totaling 25.68 million shares, or about 11.9% of issued H shares. Currently, ZHIPU’s actual free float on the Hong Kong market is only about 11.74 million shares. This means the free float will instantly expand by more than 2.2 times after the lockup expires. At current prices, the unlocked shares are worth several tens of billions of Hong Kong dollars.
This lockup pressure wasn’t first noticed on June 23. As early as mid-June, the market began discussing this risk—by the close of June 12, ZHIPU’s share price had already fallen from the May 29 high of HKD 1,993 to HKD 1,097, a 44.9% pullback from the peak. Although the price surged again on the GLM-5.2 catalyst, the shadow of the lockup remained.
When the share price is above HKD 2,400, the motivation for lockup holders to sell increases significantly. The market’s anticipation of this is one of the main drivers behind the June 23 decline.
Apology Letter and Model Capability Concerns: Sentiment Worsens
Beyond valuation and liquidity pressures, event-driven factors intensified the sell-off.
According to market sources, ZHIPU issued an apology letter on June 21, which may have added extra pressure to the June 23 share price. Although the letter’s specific content wasn’t disclosed publicly, at a sensitive moment when the share price was at historic highs, any negative news can be amplified as a sell signal.
A deeper issue is the sustainability of model capabilities. ZHIPU’s usage spikes closely align with new model launches—each new release typically brings about a month of intense usage before dropping off. Whether GLM-5.2 can maintain user stickiness and convert it into sustained revenue growth remains uncertain. Additionally, some analysts point out that, based on ZHIPU’s current USD 150 billion market cap and Anthropic’s valuation multiples, the implied ARR is about USD 4 billion, requiring a monthly growth rate of 150% from March to June—"clearly unrealistic."
As the market starts to scrutinize these numbers more rigorously, previously overlooked questions emerge.
Large Model Sector Under Pressure: Industry Narrative Is Shifting
ZHIPU’s decline isn’t an isolated event. On June 23, Hong Kong large model concept stocks collectively fell at the open, with MiniMax-W dropping over 3%. This signals a broader trend: the market is shifting from "narrative-driven" pricing of pure large model assets to "fundamental validation."
The core narratives that previously supported high valuations—"China’s Anthropic," "China AI infrastructure," "first AGI stock"—now face exponential validation pressure as the stock price crosses the trillion-dollar mark. CICC’s research report forecasts ZHIPU’s revenue to reach HKD 3.54 billion, HKD 8.11 billion, and HKD 15.02 billion in 2026, 2027, and 2028, respectively. Even if these optimistic projections are fully realized, the forecasted price-to-sales ratio for 2026 still stands at about 270 times at current market cap.
HSBC’s report also notes ZHIPU’s extremely limited free float, and with the lockup expiring in July, the sharp increase in tradable shares may stabilize the price. This means that even without fundamental deterioration, a simple increase in supply could exert sustained pressure on the price.
From a broader perspective, China’s large model industry is moving past the era of parameter narratives and scarcity premiums. Valuation anchors are shifting toward commercialization capability, compute cost control, and sustainable cash flow. ZHIPU’s trillion-dollar market cap is like an industry option ticket, but exercising that option requires real performance.
Conclusion
After reaching a historic high of HKD 2,980 on June 22, ZHIPU opened June 23 down roughly 14%, temporarily quoted at HKD 2,060 per share. This sharp pullback resulted from multiple factors: concentrated profit-taking after rapid gains, the valuation gap between a trillion-dollar market cap and HKD 700 million in revenue, the fading scarcity premium, the liquidity shock from over 25 million shares unlocking on July 8, and event-driven disruptions to market sentiment.
The deeper driver is a shift in market pricing logic—when the "first global large model stock" narrative is no longer unique, when the impending lockup expiry is about to reshape supply and demand, and when fundamental validation becomes unavoidable, ZHIPU’s valuation system is undergoing a systemic reassessment. Whether HKD 2,060 has fully priced in these risks or if the correction has just begun, the market will provide answers in the coming trading days.
Frequently Asked Questions (FAQ)
Q: How much did ZHIPU fall on June 23?
A: According to Gate market data (as of June 23, 2026), ZHIPU opened down about 14% that day, temporarily quoted at HKD 2,060 per share, with intraday losses widening to over 25%.
Q: What record did ZHIPU set on June 22?
A: On June 22, ZHIPU hit an intraday high of HKD 2,980 per share, with a market cap of HKD 1.27 trillion. It closed at HKD 2,410 per share, with a market cap of HKD 1.07 trillion, becoming the first independent Chinese large model company to break the HKD 1 trillion mark.
Q: What is ZHIPU’s financial status?
A: In 2025, ZHIPU achieved revenue of HKD 724 million, up 131.9% year-over-year, with a net loss of HKD 4.718 billion and R&D expenses of HKD 3.18 billion.
Q: How will the July lockup expiry impact ZHIPU’s share price?
A: On July 8, ZHIPU will unlock 25.68 million shares, about 11.9% of issued H shares. The current free float is only about 11.74 million shares, so the free float will more than double after the lockup, potentially exerting significant supply pressure on the share price.
Q: Does ZHIPU’s decline signal problems for the entire AI sector?
A: ZHIPU’s decline mainly reflects a valuation correction and liquidity pressure at the individual stock level. However, it also marks a shift in the market’s pricing of pure large model assets from "scarcity narrative" to "fundamental validation," a trend that could have far-reaching implications for the entire sector.
