Do Insiders Own Lots Of Shares In Sun Cheong Creative Development Holdings Limited (HKG:1781)?

The big shareholder groups in Sun Cheong Creative Development Holdings Limited (HKG:1781) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, ‘Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of HK$86m, Sun Cheong Creative Development Holdings is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don’t own shares in the company. Let’s delve deeper into each type of owner, to discover more about Sun Cheong Creative Development Holdings.

Check out our latest analysis for Sun Cheong Creative Development Holdings

SEHK:1781 Ownership Summary, February 24th 2020
SEHK:1781 Ownership Summary, February 24th 2020

What Does The Lack Of Institutional Ownership Tell Us About Sun Cheong Creative Development Holdings?

Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.

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. Sun Cheong Creative Development Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:1781 Income Statement, February 24th 2020
SEHK:1781 Income Statement, February 24th 2020

Sun Cheong Creative Development Holdings is not owned by hedge funds. The company’s largest shareholder is Uni-Pro Ltd, with ownership of 50%, This implies that they have majority interest control of the future of the company. The second and third largest shareholders are Kam Chan and Grand Mate Limited, holding 18% and 3.4%, respectively. Kam Chan also happens to hold the title of Chief Financial Officer.

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 Sun Cheong Creative Development Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 a reasonable proportion of Sun Cheong Creative Development Holdings Limited. Insiders have a HK$17m stake in this HK$86m business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

With a 25% ownership, the general public have some degree of sway over 1781. 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 Company Ownership

It seems that Private Companies own 56%, of the 1781 stock. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Sun Cheong Creative Development Holdings better, we need to consider many other factors. For example, we’ve discovered 6 warning signs for Sun Cheong Creative Development Holdings (2 are a bit concerning!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Thank you for reading.