From Guaranteed Allocation to Deferred Float: A Contract-level Census and Event Evidence on Cornerstone Unlocks in Hong Kong IPOs, 2018-2026

Abstract

Cornerstone investors in Hong Kong initial public offerings receive guaranteed allocations in exchange for a disclosed six-month lock-up, so each tranche converts a known share quantity into a contractually dated expansion of tradable supply. This paper constructs and audits the complete population of these contracts — 930 Main Board operating IPOs from January 2018 through August 2026, of which 583 (62.7%) carry cornerstone tranches mapping into 596 dated release events — and measures unlock outcomes on 231 fully audited events of the 2022–2026 cohorts, net of a systematic screen for voluntary lock-up extensions. A pre-outcome estimation gate, built on reconciling public float to immediately tradable float through allotment results, over-allotment exercises, and corporate actions, identifies 504 clean occurred events. First, deferred-supply intensity has risen: the annual median release ratio — newly eligible cornerstone shares over immediately tradable pre-release float — roughly doubled, from about 0.25 in 2018–2019 to 0.52 –0.60 in 2024–2026 (trend p < 10⁻¹⁰); both margins moved materially, with the numerator — cornerstone books relative to offer size — showing the larger change. Second, release days sharply amplify trading activity — mean volume over pre-release float roughly quadruples (p < 10⁻⁵) — and roughly double the probability of extreme daily moves. Third, prices show a small negative release-day displacement relative to each stock’s own pre-release drift (−0.58 percentage points, at the 5% significance boundary); equivalence within ±1 percentage point cannot be established, and the surrounding declines begin weeks before eligibility, consistent with younglisting drift and/or anticipatory pricing.

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