Key Insights

• Significant control over Hla Group by private companies implies that the general public has more power to influence management and governance-related decisions
• 66% of the business is held by the top 2 shareholders
• Insiders own 26% of Hla Group

To get a sense of who is truly in control of Hla Group Corp., Ltd. (SHSE:600398), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 47% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Private companies gained the most after market cap touched CN¥38b last week, while insiders who own 26% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Hla Group.

What Does The Institutional Ownership Tell Us About Hla Group?

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 Hla 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. 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 Hla Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Hla Group. Heilan Group Co., Ltd. is currently the largest shareholder, with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 25% and 3.7% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hla Group

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Hla Group Corp., Ltd.. It is very interesting to see that insiders have a meaningful CN¥9.8b stake in this CN¥38b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Hla Group. 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

Our data indicates that Private Companies hold 47%, of the company's shares. 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 Hla Group better, we need to consider many other factors. To that end, you should be aware of the 1 warning sign we've spotted with Hla Group .

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.

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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.