Is Vesync Co., Ltd's (HKG:2148) Shareholder Ownership Skewed Towards Insiders?

The big shareholder groups in Vesync Co., Ltd (HKG:2148) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of HK$17b, Vesync is a decent size, so it is probably on the radar of institutional investors. In the chart below, we can see that institutional investors have not yet purchased shares. We can zoom in on the different ownership groups, to learn more about Vesync.

View our latest analysis for Vesync

What Does The Lack Of Institutional Ownership Tell Us About Vesync?

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

Vesync is not owned by hedge funds. With a 35% stake, CEO Lin Yang is the largest shareholder. With 32% and 0.7% of the shares outstanding respectively, Yuzheng Yang and Yang Hai are the second and third largest shareholders. Interestingly, the third-largest shareholder, Yang Hai is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Vesync

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.

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 the majority of Vesync Co., Ltd. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$11b stake in this HK$17b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public holds a 33% stake in Vesync. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Vesync better, we need to consider many other factors. For instance, we've identified 1 warning sign for Vesync that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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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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