China CITIC Financial Asset Management Co., Ltd.'s (HKG:2799) largest shareholders are private companies with 27% ownership, state or government own 25%

Key Insights

• The considerable ownership by private companies in China CITIC Financial Asset Management indicates that they collectively have a greater say in management and business strategy
• A total of 2 investors have a majority stake in the company with 51% ownership
• 20% of China CITIC Financial Asset Management is held by Institutions

If you want to know who really controls China CITIC Financial Asset Management Co., Ltd. (HKG:2799), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 27% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And state or government on the other hand have a 25% ownership in the company.

Let's take a closer look to see what the different types of shareholders can tell us about China CITIC Financial Asset Management.

Check out our latest analysis for China CITIC Financial Asset Management

What Does The Institutional Ownership Tell Us About China CITIC Financial Asset Management?

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 CITIC Financial Asset Management 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see China CITIC Financial Asset Management's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in China CITIC Financial Asset Management. Looking at our data, we can see that the largest shareholder is CITIC Group Corporation with 26% of shares outstanding. Ministry of Finance of the People's Republic of China is the second largest shareholder owning 25% of common stock, and Zhongbao Investment (Beijing) Co., Ltd. holds about 18% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of China CITIC Financial Asset Management

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.

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 data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public, who are usually individual investors, hold a 10% stake in China CITIC Financial Asset Management. 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.

Private Equity Ownership

With a stake of 18%, private equity firms could influence the China CITIC Financial Asset Management board. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 27%, 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. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with China CITIC Financial Asset Management (at least 1 which can't be ignored) , and understanding them should be part of your investment process.

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.

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