Key Insights

• Significant insider control over Qi-House Holdings implies vested interests in company growth
• 51% of the company is held by a single shareholder (Tang Tong)
• Insiders have been buying lately

To get a sense of who is truly in control of Qi-House Holdings Limited (HKG:8395), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 71% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Notably, insiders have bought shares recently. So the news of stock price falling by 32% is not something they might have been expecting soon after purchasing shares.

In the chart below, we zoom in on the different ownership groups of Qi-House Holdings.

What Does The Lack Of Institutional Ownership Tell Us About Qi-House Holdings?

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 multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at 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. 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 Qi-House Holdings, for yourself, below.

Hedge funds don't have many shares in Qi-House Holdings. The company's CEO Tang Tong is the largest shareholder with 51% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Yang Songmei is the second largest shareholder owning 8.4% of common stock, and Qiang Xu holds about 7.0% of the company stock.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Qi-House Holdings

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.

It seems that insiders own more than half the Qi-House Holdings Limited stock. This gives them a lot of power. Given it has a market cap of HK$871m, that means they have HK$616m worth of shares. 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

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qi-House Holdings. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Qi-House Holdings (including 1 which shouldn't be ignored) .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.