Public companies are East Buy Holding Limited's (HKG:1797) biggest owners and were rewarded after market cap rose by HK$1.5b last week

Key Insights

• East Buy Holding's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• New Oriental Education & Technology Group Inc. owns 57% of the company
• Institutions own 14% of East Buy Holding

A look at the shareholders of East Buy Holding Limited (HKG:1797) can tell us which group is most powerful. The group holding the most number of shares in the company, around 57% to be precise, is public companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, public companies collectively scored the highest last week as the company hit HK$17b market cap following a 9.8% gain in the stock.

Let's delve deeper into each type of owner of East Buy Holding, beginning with the chart below.

See our latest analysis for East Buy Holding

What Does The Institutional Ownership Tell Us About East Buy Holding?

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.

As you can see, institutional investors have a fair amount of stake in East Buy Holding. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at East Buy Holding's earnings history below. Of course, the future is what really matters.

East Buy Holding is not owned by hedge funds. New Oriental Education & Technology Group Inc. is currently the company's largest shareholder with 57% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. Minhong Yu is the second largest shareholder owning 2.8% of common stock, and Krane Funds Advisors, LLC holds about 2.0% of the company stock. Minhong Yu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. 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 East Buy Holding

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

We can report that insiders do own shares in East Buy Holding Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$479m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

With a 26% ownership, the general public, mostly comprising of individual investors, have some degree of sway over East Buy Holding. 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.

Public Company Ownership

Public companies currently own 57% of East Buy Holding stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand East Buy Holding better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 2 warning signs for East Buy Holding 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. 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.