r/chinastocks
Zhipu is up 10x since its January IPO and just took Kingsoft's seat in the Hang Seng Tech Index
Zhipu and MiniMax's Hang Seng inclusion highlights a mispricing: HK wrappers miss the A-share AI compute layer.
- The inclusion of frontier model companies marks a milestone for the Hang Seng Tech Index, shifting focus to AI.
- There is a structural mispricing opportunity in the A-share compute layer which is overlooked by HK-only AI wrappers.
- Hyped AI model stocks like Zhipu and MiniMax have already priced in index inclusion and are burning cash rapidly.
- Low free float and historical fade patterns make them unsuitable for flow trades.
Zhipu (02513) and MiniMax (00100) just replaced Kingdee and Kingsoft in the Hang Seng Tech Index, effective June 8. First actual frontier model companies to get in, which is a bit of a milestone since that index has basically been internet plus hardware until now. Both only listed in January and got pulled in early through the fast entry rule after going vertical. Zhipu is up something like tenfold from its IPO, MiniMax maybe fourfold.
If you were hoping to front run the index buyers, too late. Bloomberg Intelligence floated southbound potential of HKD 51 to 92 billion for Zhipu and up to 47 for MiniMax, but the move already happened on the May 22 announcement when they popped 27% and 16%. By the actual effective date Zhipu was flat and MiniMax was down about 8%. CICC went straight to the Pop Mart comparison, the inclusion everyone bought and then watched fade. Free float on Zhipu is something absurd like 2.67%, both still lose money hand over fist, so I would not touch either as a flow trade.
What actually stuck with me is what the swap says about where China's AI stack trades. The model layer is in Hong Kong now. The compute layer underneath it mostly is not. Cambricon, Moore Threads, MetaX all sit on the mainland Star Market in A shares. So a Hong Kong only wrapper hands you the headline model names and quietly skips every chip company that feeds them. The one fund I found that reaches both sides is CNQQ, which already holds Cambricon, though it is small enough that I am not treating it as gospel. Most people say they own China tech without checking which floor of the building their wrapper actually walks into.