If you want to know who really controls Bonny International Holding Limited (HKG:1906), then you’ll have to look at the makeup of its share registry. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.
Bonny International Holding is a smaller company with a market capitalization of HK$684m, so it may still be flying under the radar of 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 Bonny International Holding.
What Does The Lack Of Institutional Ownership Tell Us About Bonny International Holding?
Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Bonny International Holding’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.
Hedge funds don’t have many shares in Bonny International Holding. Our data suggests that Guojun Jin, who is also the company’s Top Key Executive, holds the most number of shares at 53%. When an insider holds a sizeable amount of a company’s stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. The second largest shareholder with 5.3%, is Xiaohong Jin, followed by Weixing Luo, with an ownership of 1.1%. Interestingly, Weixing Luo is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company’s top shareholders.
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. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.
Insider Ownership Of Bonny International Holding
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.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
Our most recent data indicates that insiders own the majority of Bonny International Holding Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$684m, that means they have HK$406m 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 41% ownership, the general public have some degree of sway over 1906. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
It’s always worth thinking about the different groups who own shares in a company. But to understand Bonny International Holding better, we need to consider many other factors. Be aware that Bonny International Holding is showing 2 warning signs in our investment analysis , and 1 of those is a bit concerning…
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.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. 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.