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Morgan Stanley: Two New AI Names to Lift the Hang Seng Tech
At a glance
- •Hang Seng Tech is down over 11% year-to-date, but attention is shifting to newly listed AI names.
- •Knowledge Atlas Technology and MiniMax are expected to be added to the Hang Seng Tech index on June 8.
- •Morgan Stanley estimates passive inflows of $1.251.75 billion tied to the index inclusions.
- •Analysts raised price targets: Knowledge Atlas from HKD 560 to HKD 990 and MiniMax from HKD 990 to HKD 1,100.
- •Both companies are among the first large Chinese AI-model specialists to list in Hong Kong and could each generate $1 billion+ in revenue this year according to Morgan Stanley.
- •Index inclusion can spark near-term demand, but sustainable returns depend on execution, monetization and regulatory conditions.
Market context
Hong Kong's Hang Seng Tech index has been under pressure this year despite renewed investor enthusiasm for Chinese AI. The technology benchmark is down more than 11% year-to-date, with only seven of its constituent stocks trading in positive territory. Yet the market is now watching two recent Hong Kong IPOs closely Knowledge Atlas Technology and MiniMax after Morgan Stanley identified them as likely catalysts for significant passive inflows.
What Morgan Stanley says and why it matters
Morgan Stanley's analysts expect both Knowledge Atlas and MiniMax to be formally added to the Hang Seng Tech index on June 8. Inclusion in the benchmark typically forces index-tracking funds and ETFs to buy the newly listed shares, and the bank estimates passive inflows of roughly $1.25 to $1.75 billion as a result. Those flows could provide an immediate tailwind for the two names and help lift tech sentiment in Hong Kong more broadly.
Following the review, Morgan Stanley raised its price targets sharply. For Knowledge Atlas the target was increased from HKD 560 to HKD 990, and for MiniMax from HKD 990 to HKD 1,100. The analysts underscore that both companieseach listed in Hong Kong earlier this yearhave already seen rapid post-IPO share-price appreciation.
Both firms are among the first large Chinese public companies focused on generative AI models to list locally. Knowledge Atlas is known for its Zhipu model, which the market has praised for strong programming capabilities. MiniMax markets a broader AI stack that spans text generation through to audio creation. Morgan Stanley projects each leading Chinese AI model could generate at least $1 billion in revenue this year, with revenues potentially more than doubling next year if growth trajectories hold.
Investment implications and caveats
Index inclusion can be a meaningful near-term driver not only because of direct ETF buying but also because it raises the visibility of smaller or newer names to institutional investors. That said, investors should distinguish between flow-driven uplifts and sustainable fundamental improvements. The passive inflow estimates signal short-term demand, but long-term performance will hinge on execution, monetization of AI products, competitive positioning and regulatory developments in China.
Knowledge Atlas and MiniMax are early examples of Chinas emerging AI sector listing at scale in Hong Kong. If they deliver on commercial traction and revenue expansion, they could set a template for future listings and reinforce the region's role as a hub for AI capital formation. Conversely, any slowdown in monetization or renewed macro/regulatory headwinds could temper expectations and increase volatility.
Conclusion
Morgan Stanleys note highlights a concrete mechanismindex inclusionthat could funnel substantial passive capital into Chinas newest AI names. For traders and longer-term investors alike, Knowledge Atlas and MiniMax are worth watching: they combine strong market attention, elevated analyst targets and an industry backdrop driven by rapid adoption of AI models. As always, weigh the potential of near-term ETF-driven buying against execution risk when making investment decisions.
