Newly listed stocks in Hong Kong, radiating an 'AI' allure, have emerged as the most ruthless 'slashes' for retail investors.

Today, Unisound's stock price took a nosedive, plummeting by 40%. The cause is straightforward: the expiration of the lock-up period.

Once, Unisound was among the hottest AI stocks in Hong Kong. Within a mere two months of its debut, the stock price skyrocketed from HK$205 to HK$879, marking a staggering cumulative increase of 328%.

However, the real turning point came after its inclusion in the Stock Connect. Even excluding today's 40% plunge, Unisound's stock price has already tumbled from HK$879 to HK$121, a cumulative decline of 86%.

More intriguingly, this pattern has been observed with almost all so-called AI new listings.

Xunce's stock surged nearly sevenfold post-listing, but after its inclusion in the Stock Connect, its stock price plummeted by 68%. Dipu Technology's stock once rose by 110% after its listing, only to drop by 75% in just one month following its Stock Connect inclusion.

Today, Silicon-based Gentleman will delve into this popular 'slash' phenomenon for retail investors in Hong Kong stocks.

/ 01 / A Carefully Staged Carnival: AI New Listings Take Flight

Silicon-based Gentleman scrutinized the strategies of these AI new listings and discovered that they all adhere to a similar playbook, with minimal variation in the plot.

The first step is to rapidly inflate the stock price post-listing, creating a frenzy.

Take Unisound as an illustration. On June 30, 2025, Unisound made its debut with an opening price of HK$205. In just two months, by September 1, its stock price soared to HK$879, a 328% increase.

The same narrative unfolded with other AI concept stocks.

Xunce listed on December 30, 2025, with a stock price of HK$48. By April 13 of the following year, its stock price peaked at HK$382, a nearly 700% increase in four months.

Dipu Technology listed with an opening price of HK$56, and by March, its stock price had surged to HK$118, an increase of over 110%.

The second step is to aggressively place shares while the stock price is elevated.

Unisound serves as the most representative example. Its IPO and over-allotment combined raised approximately HK$237 million in funds. However, in the first half of 2026, the company conducted three consecutive placements of new H shares:

The first placement involved 780,000 shares at HK$252 each, a 16% discount from the previous trading day's closing price, raising approximately HK$191.69 million.

The second placement involved 1.008 million shares at HK$310 each, a 17.68% discount from the previous closing price, raising approximately HK$307.19 million.

The third placement involved 1.7 million shares at HK$228 each, raising approximately HK$381.43 million.

In total, these three placements issued 3.488 million new shares, raising approximately HK$880 million, about 3.7 times its IPO net proceeds.

Dipu Technology was no slouch either. On May 21, 2026, it announced the placement of 7.942 million shares at HK$50.58 each, raising HK$400 million.

The third step is to enter the Stock Connect and then plummet.

Unisound officially entered the Stock Connect on September 8, 2025, and its stock price peaked precisely on September 1. Including today's lock-up expiration plunge, in less than a year, Unisound's stock price has plummeted from HK$879 to HK$71.45, a staggering 91.9% decline.

Dipu Technology entered the Stock Connect on March 9, with its stock price peaking on March 5. Then, in just one month, its stock price crashed from HK$118 to HK$28.4, a 75% drop.

Xunce also entered the Stock Connect on March 9, with its stock price peaking on April 13, before dropping from HK$358 to HK$113, a 70.4% decline.

While A-shares are notorious for 'mowing down' retail investors, this round of AI new listings in Hong Kong stocks has been equally ruthless.

/ 02 / Why Have AI New Listings Become 'Slashes'?

At this juncture, you might wonder why funds in Hong Kong stocks also favor these AI new listings?

There are two core reasons.

First, these new listings have an extremely small free float, with virtually no opposing trading volume.

Unisound has a total of 41.38 million H shares, but the actual tradable shares are pitifully few.

The IPO issued 1.56 million shares, and after deducting cornerstone investors, only about 1.0981 million shares were freely tradable, accounting for just 1.55% of the total share capital. Even including the over-allotment, the external float was only about 1.3323 million shares, less than 2%.

This means that after listing, the actual tradable shares in the market were very limited. Based on the closing price of HK$296 on the listing day, Unisound's actual free float was only about HK$394 million.

The same applies to Xunce. After deducting cornerstone lock-ups, the tradable new shares were about 16.0873 million, accounting for less than 5% of the total share capital. Based on the first-day closing price, the free float market cap was only HK$944 million.

Although Dipu Technology had no cornerstone investors, it issued a total of 26.63 million shares, with the largest placee taking over 6 million shares and the top five placees taking over 15 million shares, accounting for 57.67% of the total issued shares, indicating a highly concentrated float.

Second, the exit path is sufficiently clear.

Due to the popularity of the AI concept, these companies were able to secure decent valuations during their IPOs, ensuring their inclusion in the Hang Seng Composite Index and the Stock Connect.

Unisound had a first-day market cap of approximately HK$21 billion, with 2025 revenue of RMB 1.211 billion, translating to a PS ratio of 16 times.

Xunce had a first-day market cap of approximately HK$15.6 billion, with revenue of RMB 1.284 billion, a PS ratio of 11 times.

Dipu Technology had a first-day market cap of approximately HK$21.8 billion, with revenue of just RMB 415 million, a PS ratio approaching 50 times.

The index adjustment rules in Hong Kong stocks are very clear, primarily based on liquidity and market cap. For example, under the fast-track inclusion mechanism, securities listed in the first quarter can be included in the Hang Seng Composite Index ahead of schedule if they meet the market cap requirements. Inclusion in the Hang Seng Index means securing a ticket to the Stock Connect, followed by direct capital inflows.

The strategy for funds is to drive up the stock price with a small free float before index inclusion and then sell to passively configured ETFs or mainland retail investors flowing south after inclusion, completing the arbitrage.

Through the changes in CCASS holdings on the Webb-site Legacy website, we can also clearly see this game of share manipulation.

CCASS (Central Clearing and Settlement System) is the central clearing system of Hong Kong Exchanges and Clearing.

Simply put, the majority of Hong Kong stocks are held in CCASS accounts, which include brokerage, bank custodian, and individual investor accounts.

However, it's important to note that some stocks do not enter CCASS, such as those directly held by founders or strategic shareholders.

On September 10 last year (shortly after entering the Stock Connect), the top five CCASS accounts of Unisound held 97.69% of the shares, while the top ten accounts held 99.2%. What does this indicate? It shows that the shares were extremely concentrated, with the stock price entirely controlled by a few funds.

By June 29 this year (on the eve of the lock-up expiration), the top five CCASS accounts of Unisound had reduced their holdings to 95.13%, while the top ten accounts had reduced to 97.86%.

The loosening of share concentration indicates that the early profitable funds are gradually withdrawing. When the lock-up period truly arrives and the long-held shares flood out like a tide, the already fragile stock price collapses instantly.

This is the true ecosystem of AI new listings in Hong Kong stocks: a scheme woven together by high valuations, small free floats, index inclusion expectations, and precise arbitrage. In this scheme, early funds reap huge profits, while the ones left holding the bag are often the retail investors who rushed in during the frenzy.