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Homeland Interactive Technology Ltd.'s (HKG:3798) Largest Shareholder, CEO Chengze Wu Sees Holdings Value Fall by 18% Following Recent Drop

Simply Wall St ·  04/05/2023 06:32

Key Insights

  • Homeland Interactive Technology's significant insider ownership suggests inherent interests in company's expansion
  • A total of 3 investors have a majority stake in the company with 52% ownership
  • Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Homeland Interactive Technology Ltd. (HKG:3798), 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 60% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 18% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Homeland Interactive Technology, beginning with the chart below.

View our latest analysis for Homeland Interactive Technology

ownership-breakdown
SEHK:3798 Ownership Breakdown April 4th 2023

What Does The Lack Of Institutional Ownership Tell Us About Homeland Interactive Technology?

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 are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Homeland Interactive Technology, for yourself, below.

earnings-and-revenue-growth
SEHK:3798 Earnings and Revenue Growth April 4th 2023

We note that hedge funds don't have a meaningful investment in Homeland Interactive Technology. Looking at our data, we can see that the largest shareholder is the CEO Chengze Wu with 34% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.4% and 8.7%, of the shares outstanding, respectively. Note that two of the top three shareholders are also Chief Investment Officer and Member of the Board of Directors, respectively, once again pointing to significant ownership by company insiders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Homeland Interactive Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own the majority of Homeland Interactive Technology Ltd.. This means they can collectively make decisions for the company. So they have a HK$1.2b stake in this HK$2.0b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 34% stake in Homeland Interactive Technology. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 5.7% stake in Homeland Interactive Technology. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should be aware of the 2 warning signs we've spotted with Homeland Interactive Technology .

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.

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