The streak of strong returns in the Hong Kong initial public offering (IPO) market has ended, as smaller companies face a liquidity squeeze and the broader market chases mega-deals like Zhipu AI instead.Of the 13 IPOs that debuted this week, five broke below their issue prices on day one, including Luxshare, one of Apple’s largest suppliers, which dropped more than 9 per cent to close at HK$57.35 per share on Thursday.Both Rigol Technologies, an electronic measurement instrument supplier, and Beijing TRT Healthcare dropped over 30 per cent. Among the remaining eight debutants, only snack company Qiyunshan Food opened 100 per cent higher; the rest managed gains of less than 10 per cent.Meanwhile, Yongkang Holdings, the second-largest container terminal operator in Southeast Asia, scheduled its listing for July 13 but called it off last night – despite its retail margin oversubscription reaching 6,370 times across 17 brokers.“As the six-month lock-up periods expire, many listed companies – especially AI-related stocks – are rushing to raise capital through placements,” said Steven Leung, executive director of institutional sales at UOB Kay Hian.Furthermore, overall investment sentiment in both Asian and US stock markets has weakened. Artificial intelligence-related concept stocks, previously the most celebrated, are facing clear profit-taking, which is dragging down IPO market sentiment, he added.