Stock Analysis

Private companies among Town Ray Holdings Limited's (HKG:1692) largest stockholders and were hit after last week's 10% price drop

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SEHK:1692
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Key Insights

  • Town Ray Holdings' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
  • The largest shareholder of the company is Modern Expression Limited with a 60% stake
  • Insiders own 22% of Town Ray Holdings

A look at the shareholders of Town Ray Holdings Limited (HKG:1692) can tell us which group is most powerful. We can see that private companies own the lion's share in the company with 60% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders, who own 22% shares weren’t spared from last week’s HK$118m market cap drop, private companies as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Town Ray Holdings.

View our latest analysis for Town Ray Holdings

ownership-breakdown
SEHK:1692 Ownership Breakdown June 9th 2023

What Does The Lack Of Institutional Ownership Tell Us About Town Ray Holdings?

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 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. 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. Town Ray Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

earnings-and-revenue-growth
SEHK:1692 Earnings and Revenue Growth June 9th 2023

We note that hedge funds don't have a meaningful investment in Town Ray Holdings. Our data shows that Modern Expression Limited is the largest shareholder with 60% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 8.1% and 6.2% of the shares outstanding respectively, Yat Cheong Leung and Siu Lan Li are the second and third largest shareholders. Additionally, the company's CEO Wai Ming Chan directly holds 1.4% of the total shares outstanding.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Town Ray Holdings

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. 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 a reasonable proportion of Town Ray Holdings Limited. Insiders own HK$225m worth of shares in the HK$1.0b company. 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

The general public, who are usually individual investors, hold a 19% stake in Town Ray Holdings. 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.

Private Company Ownership

We can see that Private Companies own 60%, 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Town Ray Holdings better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Town Ray Holdings you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Valuation is complex, but we're helping make it simple.

Find out whether Town Ray Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.