If you want to know who really controls Huazhong In-Vehicle Holdings Company Limited (HKG:6830), then you'll have to look at the makeup of its share registry. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.
Huazhong In-Vehicle Holdings is not a large company by global standards. It has a market capitalization of HK$5.0b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutional investors have not yet purchased much of the company. Let's delve deeper into each type of owner, to discover more about Huazhong In-Vehicle Holdings.
Check out our latest analysis for Huazhong In-Vehicle HoldingsSEHK:6830 Ownership Breakdown June 28th 2022
What Does The Lack Of Institutional Ownership Tell Us About Huazhong In-Vehicle Holdings?
We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.
There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Huazhong In-Vehicle Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.SEHK:6830 Earnings and Revenue Growth June 28th 2022
Hedge funds don't have many shares in Huazhong In-Vehicle Holdings. The company's CEO Minfeng Zhou is the largest shareholder with 75% of shares outstanding. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. Meanwhile, the second and third largest shareholders, hold 0.4% and 0.09%, of the shares outstanding, respectively.
Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Huazhong In-Vehicle Holdings
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.
I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.
Our information suggests that insiders own more than half of Huazhong In-Vehicle Holdings Company Limited. This gives them effective control of the company. Given it has a market cap of HK$5.0b, that means they have HK$3.8b worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
It's always worth thinking about the different groups who own shares in a company. But to understand Huazhong In-Vehicle Holdings better, we need to consider many other factors. For example, we've discovered 4 warning signs for Huazhong In-Vehicle Holdings (2 don't sit too well with us!) that you should be aware of before investing here.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.