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Private Companies Invested in Hang Lung Group Limited (HKG:10) Copped the Brunt of Last Week's HK$572m Market Cap Decline

Simply Wall St ·  05/30/2023 06:18

Key Insights

  • Significant control over Hang Lung Group by private companies implies that the general public has more power to influence management and governance-related decisions
  • 52% of the business is held by the top 4 shareholders
  • Institutional ownership in Hang Lung Group is 29%

If you want to know who really controls Hang Lung Group Limited (HKG:10), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 38% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, private companies endured the biggest losses as the stock fell by 3.4%.

In the chart below, we zoom in on the different ownership groups of Hang Lung Group.

Check out our latest analysis for Hang Lung Group

ownership-breakdown
SEHK:10 Ownership Breakdown May 29th 2023

What Does The Institutional Ownership Tell Us About Hang Lung Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Hang Lung Group. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Hang Lung Group's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
SEHK:10 Earnings and Revenue Growth May 29th 2023

Hedge funds don't have many shares in Hang Lung Group. Kingswick Investment Limited is currently the largest shareholder, with 33% of shares outstanding. Silchester International Investors LLP is the second largest shareholder owning 8.1% of common stock, and Dodge & Cox holds about 7.7% of the company stock.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Hang Lung Group

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. 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 less than 1% of Hang Lung Group Limited. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$146m worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 31% 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.

Private Company Ownership

It seems that Private Companies own 38%, of the Hang Lung Group stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hang Lung Group better, we need to consider many other factors. Take risks for example - Hang Lung Group has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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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