As its market value rapidly evaporates, Z.AI (02513.HK) continues to push forward with massive fundraising efforts. This scenario is extremely rare even by global securities market standards.

Over the past 60 trading days, the market capitalization of Z.AI, often dubbed "China's first foundational model stock," has shrunk by HK$1 trillion. Despite this backdrop, the company is still pursuing an aggressive fundraising cadence.

On the evening of September 13, Z.AI released an announcement detailing its latest fundraising plan: issuing up to 21.965 million new H-shares at HK$714 per share under a general mandate, with net proceeds of approximately HK$15.7 billion; concurrently issuing zero-coupon convertible bonds settled in US dollars with a principal of RMB 20.14 billion (about US$3 billion), yielding net proceeds of around HK$23.6 billion. The funds are primarily earmarked for the next-generation General Language Model (GLM) foundation, a fully self-trained system, and computing infrastructure.

This marks the third round of fundraising for Z.AI in just over eight months since its Hong Kong listing: in January, it launched its IPO with an issue price of HK$116.2 per share, raising net proceeds of approximately HK$4.9 billion; in July, it executed a "lightning placement" at HK$1,588 per share, netting around HK$31.4 billion; and in September, it combined another "lightning placement" with convertible bonds, securing roughly HK$39.3 billion in net proceeds. Together, these three rounds total an astonishing HK$75.6 billion.

On September 14, Z.AI's share price tumbled 9.08%; the following day, it fell another 5.69%, closing at HK$680 with a total market value of HK$316.6 billion. By comparison, on June 22, just over two months earlier, the stock had peaked at HK$2,980, pushing the company's market cap to as high as HK$1.3 trillion.

Continuing to fundraise aggressively amidst such a dramatic erosion of market value is a rare phenomenon in financial history. What insights can we draw from this?

First, there is evident anxiety within Z.AI's board. Global competition in foundational models is intensifying, with breakthroughs arriving at breakneck speed. The industry landscape could solidify within the next two to three years. With such a fleeting window of opportunity, the board seems willing to overlook short-term share price pain, opting instead to "stockpile ample reserves" to eliminate concerns and sprint toward the forefront of global foundational model development.

Second, capital markets remain eager to back the company. Barring any major surprises, Z.AI's latest fundraising plan is likely to succeed. According to public disclosures, nearly 70% of cornerstone investors, who saw their lock-up periods expire in early July, have explicitly stated they will hold long-term. Additionally, the July "lightning placement" at HK$1,588 per share was oversubscribed, signaling that institutional investors retain confidence in Z.AI's long-term growth trajectory.

Third, the financing instruments are becoming increasingly aggressive. The latest plan includes "zero-coupon convertible bonds settled in US dollars," which account for net proceeds of about HK$23.6 billion. This is a notably bold approach. A zero-coupon convertible, particularly one settled in a high-yield currency like the US dollar, is primarily attractive not for its interest payments but for the embedded "call option" on the stock price. The successful placement of these instruments itself reflects investors' strong expectations for a significant future appreciation in Z.AI's shares.

Fourth, the complexity of value discovery in capital markets is on full display. Over the past year-plus, Z.AI's market valuation has swung wildly: in May 2025, its pre-IPO private financing round valued the company at approximately HK$26.5 billion; by January 2026, its IPO implied a market cap of roughly HK$51 billion; in June 2026, the valuation surged past HK$1.3 trillion; and on September 15, 2026, it closed with a market cap of HK$316.6 billion. How exactly does the capital market perform value discovery? Is such discovery reliable? What is the relationship between market value and fundamental company performance? These are questions that all market participants should ponder carefully.

Fifth, there is the issue of protecting minority shareholders. Structurally, Z.AI operates as a Hong Kong-listed "Chapter 18C" company, allowing it to continuously refinance without turning a profit. The board holds a general mandate, effectively a "blank check" power pre-approved by shareholders, enabling fundraising without separate shareholder approval. Minority shareholders have little ability to intervene in real-time. Z.AI's aggressive fundraising highlights the market efficiency of this mechanism, but when share prices decline as a result, small investors seem left with no choice but to "vote with their feet." Is that fair?

In summary, while Z.AI's aggressive capital raising may be justified given the intense competition in the global large model industry, it remains highly unusual that a company reporting revenue of RMB 954 million and a loss of approximately RMB 2 billion in the first half of the year has raised a staggering HK$75.6 billion in funding this year alone, nearly a quarter of its current market capitalization. On the flip side, investor trust cannot be stretched indefinitely.