After buying recently, China Education Group Holdings Limited (HKG:839) insiders must be dismayed to see the company's market cap drop to HK$12b

Key Insights

• Insiders appear to have a vested interest in China Education Group Holdings' growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 62% ownership
• Insiders have been buying lately

To get a sense of who is truly in control of China Education Group Holdings Limited (HKG:839), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 62% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

It's interesting to note that insiders have been buying shares recently. However, with market cap down by HK$407m over the last week, their expectations were far from met.

Let's delve deeper into each type of owner of China Education Group Holdings, beginning with the chart below.

Check out our latest analysis for China Education Group Holdings

What Does The Institutional Ownership Tell Us About China Education Group 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.

China Education Group Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 China Education Group Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China Education Group Holdings. Our data shows that Ketao Xie is the largest shareholder with 31% of shares outstanding. For context, the second largest shareholder holds about 31% of the shares outstanding, followed by an ownership of 1.4% by the third-largest shareholder.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of China Education Group Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 information suggests that insiders own more than half of China Education Group Holdings Limited. This gives them effective control of the company. That means insiders have a very meaningful HK$7.2b stake in this HK$12b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 26% stake in the company, and hence can't easily be ignored. 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 China Education Group Holdings better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with China Education Group 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.

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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.