Do Institutions Own Chong Kin Group Holdings Limited (HKG:1609) Shares?

A look at the shareholders of Chong Kin Group Holdings Limited (HKG:1609) 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. 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.

Chong Kin Group Holdings has a market capitalization of HK$8.2b, so we would expect some institutional investors to have noticed the stock. Taking a look at our data on the ownership groups (below), it seems that institutional investors have not yet purchased shares. Let's take a closer look to see what the different types of shareholders can tell us about Chong Kin Group Holdings.

View our latest analysis for Chong Kin Group Holdings

What Does The Lack Of Institutional Ownership Tell Us About Chong Kin Group Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 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 Chong Kin Group Holdings, for yourself, below.

We note that hedge funds don't have a meaningful investment in Chong Kin Group Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Chong Kin Group Holdings' case, its Top Key Executive, Jinbing Zhang, is the largest shareholder, holding 58% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 9.1% and 4.9%, of the shares outstanding, respectively. In addition, we found that Chao Ma, the CEO has 2.0% of the shares allocated to their name.

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 Chong Kin Group Holdings

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

It seems that insiders own more than half the Chong Kin Group Holdings Limited stock. This gives them a lot of power. Insiders own HK$4.9b worth of shares in the HK$8.2b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

With a 22% ownership, the general public have some degree of sway over Chong Kin Group Holdings. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 18%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 4 warning signs we've spotted with Chong Kin Group Holdings (including 2 which are a bit concerning) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.

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