What type of shareholders own the most shares of Macau Legend Development Limited (HKG: 1680)?

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If you want to know who really controls Macau Legend Development Limited (HKG: 1680), then you will have to look at the makeup of its share register. Large companies usually have institutions as shareholders, and we usually see insiders holding shares in smaller companies. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.

With a market cap of HK $ 5.4 billion, Macau Legend Development is a small cap stock, so it may not be well known to many institutional investors. In the graph below, we can see that the institutions are not really present on the share register. Let’s take a closer look at what different types of shareholders can tell us about Macau Legend Development.

Check out our latest analysis for Macao Legend Development

SEHK: 1680 Distribution of ownership September 19, 2021

What does the lack of institutional ownership tell us about the development of the Macau legend?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their liking. But it is unusual to see large companies without any institutional investor.

There are many reasons why a company may not have institutions listed in the share register. It can be difficult for institutions to buy large amounts of stocks if liquidity (the number of stocks traded each day) is low. If the company did not need to raise capital, institutions might not have the opportunity to build up a position. Alternatively, there could be something about the business that has kept institutional investors out. Macau Legend Development’s earnings and revenue (below) may not be convincing to institutional investors – or they may simply not have taken a close look at the company.

profit and revenue growth
SEHK: 1680 Profit and Revenue Growth September 19, 2021

We note that the hedge funds do not have a significant investment in Macau Legend Development. Looking at our data, we can see that the largest shareholder is CEO Weng Lin Chan with 33% of the shares outstanding. In comparison, the second and third shareholders hold around 16% and 15% of the capital.

To make our study more interesting, we found that the top 3 shareholders have a controlling stake in the company, which means that they are powerful enough to influence the decisions of the company.

While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. Our information suggests there is no analyst coverage of the stock, so it is likely little known.

Insider property of the development of the Macau legend

The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our information suggests that insiders have a significant stake in Macau Legend Development Limited. It has a market cap of just HK $ 5.4 billion, and insiders have shares worth HK $ 2.5 billion in their own name. I would say this shows alignment with shareholders, but it should be noted that the company is still quite small; some insiders may have founded the company. You can click here to see if these insiders have bought or sold.

General public property

The general public has a 20% stake in Macau Legend Development. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Owned by a private company

Our data indicates that private companies own 33% of the company’s shares. It may be worth pursuing the question further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the business.

Next steps:

I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well. For example, we have identified 3 warning signs for Macao Legend Development (2 cannot be ignored) that you should be aware of.

If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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