Dah Sing Banking Group Limited's (HKG:2356) market cap touched HK$10.0b last week, benefiting both public companies who own 74% as well as institutions

By
Simply Wall St
Published
January 10, 2022
SEHK:2356
Source: Shutterstock

A look at the shareholders of Dah Sing Banking Group Limited (HKG:2356) can tell us which group is most powerful. With 74% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 4.7% increase in the stock price last week, public companies profited the most, but institutions who own 14% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Dah Sing Banking Group, beginning with the chart below.

See our latest analysis for Dah Sing Banking Group

ownership-breakdown
SEHK:2356 Ownership Breakdown January 10th 2022

What Does The Institutional Ownership Tell Us About Dah Sing Banking Group?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Dah Sing Banking Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Dah Sing Banking Group's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SEHK:2356 Earnings and Revenue Growth January 10th 2022

Hedge funds don't have many shares in Dah Sing Banking Group. Dah Sing Financial Holdings Limited is currently the company's largest shareholder with 74% of shares outstanding. This implies that they have majority interest control of the future of the company. Meanwhile, the second and third largest shareholders, hold 3.9% and 2.5%, of the shares outstanding, respectively.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Dah Sing Banking Group

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data suggests that insiders own under 1% of Dah Sing Banking Group Limited in their own names. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around HK$21m worth of shares (at current prices). It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

With a 12% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Dah Sing Banking Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 74% of the Dah Sing Banking Group shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Dah Sing Banking Group better, we need to consider many other factors. Take risks for example - Dah Sing Banking Group has 1 warning sign we think you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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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