What Kind Of Investor Owns Most Of 361 Degrees International Limited (HKG:1361)?

If you want to know who really controls 361 Degrees International Limited (HKG:1361), then you’ll have to look at the makeup of its share registry. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. 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.

With a market capitalization of HK$2.9b, 361 Degrees International is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions own shares in the company. Let’s delve deeper into each type of owner, to discover more about 361 Degrees International.

See our latest analysis for 361 Degrees International

SEHK:1361 Ownership Summary, January 15th 2020
SEHK:1361 Ownership Summary, January 15th 2020

What Does The Institutional Ownership Tell Us About 361 Degrees International?

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 own 6.6% of 361 Degrees International. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of 361 Degrees International, (below). Of course, keep in mind that there are other factors to consider, too.

SEHK:1361 Income Statement, January 15th 2020
SEHK:1361 Income Statement, January 15th 2020

361 Degrees International is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Wuhao Ding with 17% of shares outstanding. The second and third largest shareholders are Huihuang Ding and Huirong Ding, each holding around 16% of the shares outstanding. They also hold the titles of Top Key Executive and Member of the Board of Directors, respectively. This once again signifies considerable insider ownership amongst the company’s top shareholders.

Our analysis suggests that the top 4 shareholders control 56% of the company which essentially means that there is concentrated ownership amongst the top shareholders, most of whom happen to be insiders!

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 361 Degrees International

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 the majority of 361 Degrees International Limited. This means they can collectively make decisions for the company. So they have a HK$1.9b stake in this HK$2.9b business. 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 have some degree of sway over 1361. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we’ve spotted 3 warning signs for 361 Degrees International (of which 1 is concerning!) you should know about.

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.

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.