Xiabuxiabu Catering Management (China) Holdings Co., Ltd. (HKG:520) CEO Kuang-Chi Ho, the company's largest shareholder sees 6.9% reduction in holdings value

By
Simply Wall St
Published
November 23, 2021
SEHK:520
Source: Shutterstock

If you want to know who really controls Xiabuxiabu Catering Management (China) Holdings Co., Ltd. (HKG:520), then you'll have to look at the makeup of its share registry. With 42% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to HK$6.2b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Xiabuxiabu Catering Management (China) Holdings, beginning with the chart below.

See our latest analysis for Xiabuxiabu Catering Management (China) Holdings

ownership-breakdown
SEHK:520 Ownership Breakdown November 23rd 2021

What Does The Institutional Ownership Tell Us About Xiabuxiabu Catering Management (China) Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Xiabuxiabu Catering Management (China) Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Xiabuxiabu Catering Management (China) Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:520 Earnings and Revenue Growth November 23rd 2021

Xiabuxiabu Catering Management (China) Holdings is not owned by hedge funds. The company's CEO Kuang-Chi Ho is the largest shareholder with 42% of shares outstanding. With 14% and 5.1% of the shares outstanding respectively, General Atlantic Service Company, L.P. and Invesco Ltd. are the second and third largest shareholders.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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 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 Xiabuxiabu Catering Management (China) 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 Xiabuxiabu Catering Management (China) Holdings Co., Ltd.. It has a market capitalization of just HK$6.2b, and insiders have HK$2.6b worth of shares in their own names. 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 31% stake in Xiabuxiabu Catering Management (China) Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 14% stake in Xiabuxiabu Catering Management (China) Holdings. This suggests they can be influential in key policy decisions. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Xiabuxiabu Catering Management (China) Holdings , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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