Insiders with their considerable ownership were the key benefactors as Arta TechFin Corporation Limited (HKG:279) touches HK$785m market cap

Key Insights

• Significant insider control over Arta TechFin implies vested interests in company growth
• Chi-Kong Cheng owns 72% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Arta TechFin Corporation Limited (HKG:279), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 72% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, insiders benefitted the most after the company's market cap rose by HK$77m last week.

Let's delve deeper into each type of owner of Arta TechFin, beginning with the chart below.

View our latest analysis for Arta TechFin

What Does The Lack Of Institutional Ownership Tell Us About Arta TechFin?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. 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. Arta TechFin might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

We note that hedge funds don't have a meaningful investment in Arta TechFin. Chi-Kong Cheng is currently the largest shareholder, with 72% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With an ownership of 5.9%, the second largest shareholder is Gain Bright Limited

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Arta TechFin

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Arta TechFin Corporation Limited. This gives them effective control of the company. That means they own HK$562m worth of shares in the HK$785m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 22% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Arta TechFin. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 5.9%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Arta TechFin better, we need to consider many other factors. For instance, we've identified 3 warning signs for Arta TechFin (2 are a bit concerning) that you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.