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Alibaba Health Information Technology Limited's (HKG:241) Last Week's 7.8% Decline Must Have Disappointed Public Companies Who Have a Significant Stake

Simply Wall St ·  Oct 17, 2022 21:05

If you want to know who really controls Alibaba Health Information Technology Limited (HKG:241), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, public companies endured the biggest losses as the stock fell by 7.8%.

Let's take a closer look to see what the different types of shareholders can tell us about Alibaba Health Information Technology.

View our latest analysis for Alibaba Health Information Technology

ownership-breakdownSEHK:241 Ownership Breakdown October 18th 2022

What Does The Institutional Ownership Tell Us About Alibaba Health Information Technology?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Alibaba Health Information Technology. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Alibaba Health Information Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growthSEHK:241 Earnings and Revenue Growth October 18th 2022

Alibaba Health Information Technology is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Alibaba Group Holding Limited with 57% of shares outstanding. This implies that they have majority interest control of the future of the company. Xiao Ying Chen is the second largest shareholder owning 5.8% of common stock, and Yunfeng Capital holds about 2.2% of the company stock.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Alibaba Health Information Technology

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

We can see that insiders own shares in Alibaba Health Information Technology Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$2.6b worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 25% stake in Alibaba Health Information Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 57% of the Alibaba Health Information Technology shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.

Disclaimer: This content is for informational and educational purposes only and does not constitute a recommendation or endorsement of any specific investment or investment strategy. Read more
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