Hong Kong AI Short Sellers Retreat As Zhipu Short Positions Fall More Than 90% Since Year Start

Since the start of 2026, Hong Kong’s AI sector has stood out as the market’s most prominent theme, with MINIMAX‑W (00100.HK) and Zhipu (02513.HK) emerging as leading domestic large‑model players. By April 1, both issuers had recorded cumulative gains from their offer prices of 475.45% and 570.40% respectively, ranking them among the top performers year‑to‑date.

Although both stocks were added to the Hong Kong Exchange’s short‑selling list on February 27, shorting activity did not intensify as might have been expected. Instead, short positions contracted sharply from their peaks, a divergence that has attracted broad market attention. MINIMAX‑W experienced an early surge in short interest, with shorted shares reaching a high of 925,200—equivalent to HKD 665 million in short value—but by last Thursday shorted volume had fallen to 157,200 shares, an 83.01% decline from the peak, and short value had dropped to HKD 150 million, down 77.44%. Zhipu’s reduction was even more pronounced: shorted shares peaked at 1,507,900, corresponding to HKD 952 million, but had plunged to 47,500 shares by last Thursday, a fall of 96.85%, while short value contracted to HKD 37 million, a 96.11% decline, leaving short activity at near‑negligible levels.

Multiple factors underlie the rapid withdrawal of bearish positions. Both companies continued to deliver positive operational and product developments after being included on the short list, strengthening fundamental support. MINIMAX announced its next‑generation Agent flagship model M2.7 on March 18, introducing a “model self‑evolution” pathway and demonstrating the capacity to assume 30%–50% of certain R&D workloads, advancing AI from passive execution toward active evolution. Zhipu released its first post‑listing financial report on April 1 and simultaneously unveiled significant updates to its GLM‑5 series; the stock rose 32.44% that day and its market capitalization surpassed HKD 400 billion, a record high.

Prior sharp price corrections in late February also reduced the relative attractiveness of shorting. Zhipu fell from a high of HKD 725 on February 20 to a low of HKD 556.5, a maximum decline of 23.24%, while MINIMAX retreated from HKD 970 to HKD 753.5, a maximum drop of 22.32%. These adjustments eased valuation pressure to some extent, narrowing the margin of safety for shorts. At the same time, share prices remain at historically elevated levels, increasing the potential loss exposure for short sellers and further dampening short interest.

Concentrated long positions have reinforced the stocks’ resilience. Both names attracted substantial clustered holdings from southbound flows and institutional investors, creating a powerful long bias that raises the risk of forced covering when positive catalysts emerge. Finally, market perception has shifted from viewing domestic large‑model leaders as speculative bubbles toward recognizing them as long‑term growth stories; investors are increasingly focused on technological moats, commercialization capability and sustainable development prospects, a change in sentiment that has reduced the appeal of short strategies predicated on transient overvaluation and contributed to the rapid contraction of bearish positions.