Hao Tian International Construction Investment Group Limited's (HKG:1341) market cap dropped HK$533m last week; Retail investors bore the brunt

Key Insights

• Significant control over Hao Tian International Construction Investment Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• 58% of the business is held by the top 3 shareholders
• Insiders own 20% of Hao Tian International Construction Investment Group

A look at the shareholders of Hao Tian International Construction Investment Group Limited (HKG:1341) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 33% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, retail investors as a group endured the highest losses last week after market cap fell by HK$533m.

Let's take a closer look to see what the different types of shareholders can tell us about Hao Tian International Construction Investment Group.

View our latest analysis for Hao Tian International Construction Investment Group

What Does The Lack Of Institutional Ownership Tell Us About Hao Tian International Construction Investment Group?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Hao Tian International Construction Investment Group, for yourself, below.

Hedge funds don't have many shares in Hao Tian International Construction Investment Group. Looking at our data, we can see that the largest shareholder is Aceso Life Science Group Limited with 28% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 12% of the stock.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 58% stake.

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 Hao Tian International Construction Investment Group

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.

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 a reasonable proportion of Hao Tian International Construction Investment Group Limited. Insiders have a HK$1.2b stake in this HK$6.1b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hao Tian International Construction Investment Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 18%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

It appears to us that public companies own 28% of Hao Tian International Construction Investment Group. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hao Tian International Construction Investment Group , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.