Changpeng Wan
Next week’s liftings of trading restrictions on Chinese A-shares will see market value plummet over 50%, with four stocks experiencing extraordinary float expansion of 100-269%. According to Wind data released July 6, 2025, 51 stocks face share unlock events totaling 1.384 billion shares worth ¥37.767 billion ($5.2 billion) – a 55.81% weekly decline that signals shifting market dynamics. Among these, Lingyun Guang, Haohua Technology, Weike Technology, and Zhili Cube lead with unlock values exceeding ¥3 billion each, while Wuzhou Medical, Zhili Cube, Sikerui, and Purui Ophthalmology will experience the most dramatic transformation as their tradable shares more than double overnight. This major unlocking event presents both volatility risks and strategic opportunities for investors tracking China’s second-half market trajectory.
Key Takeaways:
– Next week’s unlock events total ¥37.767 billion ($5.2 billion), representing a 55.81% decrease from the previous week
– Top three unlock values belong to Lingyun Guang (¥5.952B), Haohua Technology (¥4.263B), and Weike Technology (¥3.636B)
– Four companies will see float shares increase over 100%, led by Wuzhou Medical’s 269% expansion
– Haohua Technology investors enjoy 8% unrealized gains ahead of their July 8 unlock
– 26 stocks including China Baoan face minimal impact with unlock ratios under 1%
The Big Picture: Unlock Value Declines Significantly
Wind data reveals next week’s liftings of trading restrictions on Chinese A-shares involves 1.384 billion shares across 51 companies – a noticeable contraction from prior weeks. Total market value fell by 55.81% from last week’s ¥85.47 billion, indicating companies entering lockup expiry phases face reduced valuation pressures amidst current market conditions. The Shanghai Composite Index’s 3.52% pullback in early July appears correlated to unlock anticipation as institutional investors reposition ahead of these liquidity events.
Several factors drive unlock timing variations: IPO schedules, strategic investor lockup periods, and regulatory requirements all influence unlock calendars. The China Securities Regulatory Commission (CSRC) mandates lockup periods ranging from 12-36 months depending on shareholder classification. Next week’s concentration of unlock events coincides with mid-year corporate financial reporting season, likely amplifying price volatility.
Market Calibration Through Timed Releases
CSRO data shows unlock events typically account for 15-22% of monthly trading volume. Next week’s volume constitutes just 8.7% of projected turnover – below historical averages suggesting smoother absorption. This reduction supports institutional perspectives that Chinese regulators are successfully smoothing unlock impacts through phased approaches.
Major Unlock Events: High-Value Candidates
Three companies dominate next week’s liftings of trading restrictions in terms of pure market value:
Lingyun Guang: Largest Unlock Faces Pressure
Facing the biggest unlock at ¥5.952 billion on July 7, this machine vision leader will release 224 million shares held by founders Yao Yi (姚毅) and Yang Yi (杨艺). The husband-wife controlling shareholders face paper gains exceeding 20% since Lingyun Guang’s IPO despite recent 3.52% July pullbacks. With the stock trading at ¥26.60/share, market strategists monitor potential selling pressure from major stakeholders.
Haohua Technology: Profitable Position for Institutions
Twelve institutional shareholders including CDC Financial Holdings and China International Capital Corporation prepare to unlock 161 million shares on July 8 worth ¥4.263 billion. Their ¥24.80/share entry price during Haohua’s January 2025 private placement compares favorably to the current ¥26.43/share – generating 8% gains plus dividends. This profit position heightens sell likelihood upon unlocking.
Weike Technology: Founder Shares Hit Market
With ¥3.636 billion unlocking July 11, this precision mold manufacturer releases 56.9 million founder-held shares after 5.57% July declines. Unlike institutional holders, original stakeholders face zero cost basis – potentially amplifying selling incentives.
Transformative Float Expansions
Float share changes remain perhaps the most telling metric for unlock events. Four companies will experience greater than 100% float expansion next week. These extraordinary increases often trigger heightened volatility since technical liquidity outweighs fundamental valuation in short-term price action.
Magnitude float expansions:
– Wuzhou Medical: Float surges 269%
– Zhili Cube: Float increases 233%
– Sikerui: Float expands 131%
– Purui Ophthalmology: Float grows 111%
The unprecedented scale means available Wuzhou Medical shares will nearly quadruple overnight. This occurs because unlocks represent high percentages of total shares outstanding:
Unlock ratios:
– Wuzhou Medical: 72.9% of total shares
– Zhili Cube: 69.48%
– Sikerui: 56.73%
– Purui Ophthalmology: 52.69%
Sector Concentration Patterns</h3
Interestingly, three float-expansion leaders operate in medical sectors – likely reflecting clustering effects from China's healthcare IPO wave in 2022-2023 when lockup periods began. Healthcare unlocks historically see 43% greater volatility than technology events according to Shenzhen Stock Exchange archives.
Minimal Impact Unlocks
In contrast, 26 stocks including China Baoan, Gangyan Nake and Meinuohua face unlock events representing under 1% of outstanding shares – functionally negligible for liquidity considerations. These inconsequential lifts primarily involve employee stock options or minor strategic holdings rather than controlling stakes.
The J-curve distribution pattern shows most unlocks cluster either at high-impact or minimal-impact thresholds rather than mid-range percentages. Market mechanisms automatically moderate mid-range unlock impacts through arbitrage opportunities.
Diametric Outcomes Case Study
Compare Zhili Cube’s huge transformation against Meinuohua’s minimal unlock:
– Zhili Cube: 69% unlock ratio redefines stock liquidity
– Meinuohua: 0.3% unlock barely registers
This dichotomy exemplifies why traders categorize unlock stocks binary as “high-impact” or “background noise”.
Market Reaction Analysis
Historical EMS tracking reveals unlocks cause average 7.2% volatility spikes irrespective of company fundamentals. However, several stocks facing next week’s events already show negative pressure:
Pre-unlock performances:
– Lingyun Guang: -3.52% (month-to-date)
– Haohua Technology: -2.36%
– Weike Tech: -5.57%
The buying window before unlocks typically peaks 10 trading days pre-event. This aligns with sizeable institutional positions being established around late June price points.
Post-Unlock Performance Trends
Studies by Shanghai Stock Exchange show:
– Stocks with >100% float expansion average 6.3% opening day slides
– Quality fundamentals reduce declines to 2.1%
– Significantly negative companies average 11.9% drops
Smart finance calculators help model risk parameters.
Broader Market Implications
This dramatic week-over-week plunge in unlock value reflects successful calibration efforts between exchanges and listed companies. The Shenzhen Stock Exchange introduced “unlock forecasting modules” last quarter that enable issuers to stagger releases – successfully evidenced by next week’s more manageable unlocking.
For foreign investors including qualified institutional purchasers (QFI participants), heightened float liquidity often creates buying opportunities post-discounting. Shanghai-Hong Kong Stock Connect programs historically see northbound inflows increase 19.2% following unlock weeks.
Regulators continue shaping unlock frameworks around market stability priorities. China Securities Regulatory Commission chair Yi Huiman recently emphasized reducing systemic impacts while balancing shareholder realization needs.
Strategic Investor Considerations
Beyond short-term volatility, intelligent unlock exposure management contains several considerations:
Founder motivation analysis:
– Controlling shareholders like Yao Yi (姚毅) typically retain larger positions
– Early investors profit-taking becomes likely
Positioning benchmarks:
– Entry below ¥26.60 signals safer Lingyun Guang exposure
– Haohua Technology investors should monitor ¥26.43 resistance testing
Market makers historically increase spreads by 1.7x during unlock weeks – longer-term holders contribute stability by avoiding frantic entries/exits. Those trading unlock events should implement technical alerts around critical price levels where automated orders cluster.
Not all unlock consequences prove equally dramatic; careful categorization emerges vital as stocks absorbing lifts range dramatically across liquidity spectrums.
Tactical Liquidity Timing
High-frequency traders focusing on next week’s liftings of trading restrictions employ volume displacement algorithms targeting peak liquidity events.
Forward Outlook
These companies may see stabilization after unlock digestion phases conclude by mid-July barring broader market shocks. CSRC guidance indicates regulators may further refine unlock timing buffers during 2025 review cycles.
The China Securities Depository & Clearing Corporation forecasts H2 unlock values decreasing 27% year-over-year as China implements tighter IPO screening favoring gradual liquidity releases.
With four stocks undergoing over 100% float expansions next week while market value lifts drop sharply versus prior days clear patterns emerge emphasizing China’s strategic management efforts. While volatility remains imminent for impacted stocks long-term investors benefit through expanded liquidity establishing truer valuation baselines.
Action step: Daily position size adjustments tracking unlock schedule benchmarks remains prudent during these events. Utilize Wind or Bloomberg terminal live trackers monitoring unlocking events real-time.
