What Kind Of Shareholders Hold The Majority In Carrianna Group Holdings Company Limited's (HKG:126) Shares?

By
Simply Wall St
Published
August 25, 2021
SEHK:126
Source: Shutterstock

If you want to know who really controls Carrianna Group Holdings Company Limited (HKG:126), then you'll have to look at the makeup of its share registry. 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.

Carrianna Group Holdings is a smaller company with a market capitalization of HK$1.1b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased much of the company. Let's delve deeper into each type of owner, to discover more about Carrianna Group Holdings.

Check out our latest analysis for Carrianna Group Holdings

ownership-breakdown
SEHK:126 Ownership Breakdown August 25th 2021

What Does The Lack Of Institutional Ownership Tell Us About Carrianna Group 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. Alternatively, there might be something about the company that has kept institutional investors away. 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 Carrianna Group Holdings, for yourself, below.

earnings-and-revenue-growth
SEHK:126 Earnings and Revenue Growth August 25th 2021

Carrianna Group Holdings is not owned by hedge funds. Our data suggests that Kai Cheung Ma, who is also the company's Top Key Executive, holds the most number of shares at 31%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. For context, the second largest shareholder holds about 16% of the shares outstanding, followed by an ownership of 8.0% by the third-largest shareholder. Interestingly, the second-largest shareholder, Kai Yum Ma is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far I can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Carrianna 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.

Our information suggests that insiders own more than half of Carrianna Group Holdings Company Limited. This gives them effective control of the company. So they have a HK$607m stake in this HK$1.1b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 37% ownership, the general public have some degree of sway over Carrianna Group 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

Our data indicates that Private Companies hold 4.8%, of the company's shares. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Carrianna Group Holdings has 6 warning signs (and 2 which make us uncomfortable) we think you should know about.

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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