Key Insights

• Austar Lifesciences' significant insider ownership suggests inherent interests in company's expansion
• Kwok Keung Ho owns 67% of the company
• 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 Austar Lifesciences Limited (HKG:6118), 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 individual insiders with 74% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to HK$1.1b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Austar Lifesciences, beginning with the chart below.

See our latest analysis for Austar Lifesciences

What Does The Lack Of Institutional Ownership Tell Us About Austar Lifesciences?

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. Austar Lifesciences might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Austar Lifesciences is not owned by hedge funds. With a 67% stake, CEO Kwok Keung Ho is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. With 7.3% and 0.002% of the shares outstanding respectively, Kin Hung Ho and LGT Capital Partners Ltd. are the second and third largest shareholders. Interestingly, the second-largest shareholder, Kin Hung Ho is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Austar Lifesciences

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own the majority of Austar Lifesciences Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$1.1b, that means they have HK$799m worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

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. Take risks for example - Austar Lifesciences has 3 warning signs (and 1 which is concerning) we think you should know about.

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.

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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.