What kind of shareholders make up the share register of Hailan Holdings Limited (HKG:2278)?
Every investor in Hailan Holdings Limited (HKG:2278) should know the most powerful shareholder groups. Big companies usually have institutions as shareholders, and we usually see insiders owning shares in small companies. I like to see at least a little insider ownership. As Charlie Munger said “Show me the incentive and I’ll show you the result”.
Hailan Holdings is not a big company by global standards. It has a market cap of HK$1.6 billion, meaning it wouldn’t get the attention of many institutional investors. Looking at our data on ownership groups (below), it appears that institutions are not listed on the share register. We can zoom in on the different ownership groups, to learn more about Hailan Holdings.
Check out our latest analysis for Hailan Holdings
What does the lack of institutional ownership tell us about Hailan Holdings?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their liking. But it’s unusual to see large companies without institutional investors.
There are several explanations why institutions do not own stocks. The most common is that the business is too small relative to the funds under management, so the institution doesn’t bother to look closely at the business. On the other hand, it’s always possible for professional investors to avoid a company because they think it’s not the best place for their money. Institutional investors may not find the company’s historic growth impressive, or there may be other factors at play. You can see Hailan Holdings’ past earnings performance for yourself below.
We note that hedge funds have no significant investment in Hailan Holdings. Our data shows that Man Yeung is the largest shareholder with 75% of shares outstanding. With such a stake in ownership, we infer that they have significant control over the future of the business.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.
Insider ownership of Hailan Holdings
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our most recent data indicates that insiders own the majority of Hailan Holdings Limited. This means they can collectively make decisions for the business. So they have a HK$1.2 billion stake in this HK$1.6 billion business. Most would be delighted to see the board investing alongside them. You may wantdiscover (free) whether they bought or sold.
General public property
The general public, including retail investors, owns 25% of the company’s capital and therefore cannot be easily ignored. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.
It is always useful to think about the different groups that own shares in a company. But to better understand Hailan Holdings, we need to consider many other factors. For example, we have identified 2 warning signs for Hailan Holdings (1 is concerning) that you should be aware of.
Sure this may not be the best stock to buy. So take a look at this free free list of interesting companies.
NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.