What Is The Ownership Structure Like For BOC Hong Kong (Holdings) Limited (HKG:2388)?

A look at the shareholders of BOC Hong Kong (Holdings) Limited (HKG:2388) can tell us which group is most powerful. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. We also tend to see lower insider ownership in companies that were previously publicly owned.

BOC Hong Kong (Holdings) has a market capitalization of HK$257b, so it's too big to fly under the radar. We'd expect to see both institutions and retail investors owning a portion of the company. Taking a look at our data on the ownership groups (below), it seems that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about BOC Hong Kong (Holdings).

See our latest analysis for BOC Hong Kong (Holdings)

What Does The Institutional Ownership Tell Us About BOC Hong Kong (Holdings)?

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.

We can see that BOC Hong Kong (Holdings) does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 BOC Hong Kong (Holdings), (below). Of course, keep in mind that there are other factors to consider, too.

BOC Hong Kong (Holdings) is not owned by hedge funds. Bank of China Limited is currently the company's largest shareholder with 66% of shares outstanding. This implies that they have majority interest control of the future of the company. For context, the second largest shareholder holds about 1.7% of the shares outstanding, followed by an ownership of 1.0% by the third-largest shareholder.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of BOC Hong Kong (Holdings)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 less than 1% of BOC Hong Kong (Holdings) Limited. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$19m of stock. 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

The general public, with a 25% stake in the company, will not easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 66% of BOC Hong Kong (Holdings). We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - BOC Hong Kong (Holdings) has 2 warning signs (and 1 which doesn't sit too well with us) we think you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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. 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.
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