China CITIC Financial Asset Management Co., Ltd.'s (HKG:2799) market cap surged HK$6.4b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• China CITIC Financial Asset Management's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 2 shareholders
• Institutional ownership in China CITIC Financial Asset Management is 19%

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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. With 26% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 8.1% gain.

Let's delve deeper into each type of owner of China CITIC Financial Asset Management, beginning with the chart below.

View our latest analysis for China CITIC Financial Asset Management

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

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

China CITIC Financial Asset Management 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. 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 CITIC Financial Asset Management's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in China CITIC Financial Asset Management. Our data shows that CITIC Group Corporation is the largest shareholder 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.

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. 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 data cannot confirm that board members are holding shares personally. We do not see this low level of ownership often, and it is possible our data is imperfect. But shareholders can click here to check if insiders have been selling stock.

General Public Ownership

The general public-- including retail investors -- own 12% stake in the company, and hence can't easily be ignored. 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 Equity Ownership

With a stake of 18%, private equity firms could influence the China CITIC Financial Asset Management board. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

Our data indicates that Private Companies hold 26%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. For example, we've discovered 3 warning signs for China CITIC Financial Asset Management (1 shouldn't be ignored!) that you should be aware of before investing here.

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.