Last month, Lai, 78, was found guilty of being the "mastermind" on two counts of conspiracy to collude with foreign forces under a China-imposed national security law, and conspiracy to publish seditious material.
Lai has denied all charges.
The verdict was criticised by Britain, the European Union, the United States and others. Hong Kong authorities say Lai received a fair trial and the national security law has restored stability to the city.
Hearings such as Monday's give defence lawyers the chance to seek a more lenient jail term than the 10 years to life imprisonment Lai could face for his convictions, set out by guidelines in the security law.
Lai sat in the glass dock with eight trial defendants, including two key prosecution witnessess, Andy Li and Wayland Chan Tsz-wah, separated by half-a-dozen prison guards.
PROSECUTOR SAYS LAU'S HEALTH IS STABLE
Prosecutor Anthony Chau dismissed recent concerns that Lau's health had deteriorated in prison, citing a January 9 medical report that called his condition "stable".
"After examination, no obvious abnormality was found," Chau added, referring to heart palpitations Lai's lawyers had flagged last August.
A longstanding critic of the Chinese Communist Party (CCP)and founder of the now shuttered pro-democracy Apple Daily newspaper, Lai is the highest-profile figure to face prosecution under a years-long national security crackdown in the China-ruled city following mass pro-democracy protests in 2019.
The judges held that Lai had used his influence and the Apple Daily tabloid to run a campaign to "seek the downfall of the CCP, even though the ultimate cost was the sacrifice of the interests of the people" of China and Hong Kong.
Priscilia Lam, a lawyer for prosecution witness Wayland Chan, asked for his sentence to be cut at least by half, for acting as a "supergrass" informant who provided key evidence against Lai and the rest.
The three other prosecution witnesses are Cheung Kim-hung, former CEO of Lai's once-listed company, Next Digital; Apple Daily's former associate publisher Chan Pui-man; and former editorial writer Yeung Ching-kee.
NEARLY 100 QUEUED UP OUTSIDE COURT
Nearly 100 people had queued overnight outside the court building ahead of the hearing, some lining up three days in advance, equipped with sleeping bags, blankets and cardboard sheets for makeshift beds.
"Many people still support Mr. Lai," said Lee Ying-chi, who said she had queued for several days. "We hope that he can be immediately released. He hasn't done anything wrong."
In an interview this month, U.S. President Donald Trump said he had asked Chinese President Xi Jinping to release Lai, whom he called a "positive activist", but got no reply.
Five experts appointed by the United Nations Human Rights Council have also called for Lai's release on humanitarian grounds, saying his conviction showed a "dramatic decline in fundamental freedoms and judicial independence".
(Reporting by Jessie Pang and James Pomfret; Editing by Kate Mayberry, Lincoln Feast and Clarence Fernandez)
Sebastian Lai, son of pro-democracy Hong Kong tycoon Jimmy Lai, following a press conference in London, Britain, 15 December 2025. Pro-democracy Hong Kong tycoon Jimmy Lai, 78, has been found guilty of sedition and colluding with foreign forces at a court in Hong Kong. Lai has pleaded not guilty to the charges. EPA/ANDY RAIN