Sovereign wealth funds among China International Capital Corporation Limited's (HKG:3908) largest shareholders, saw gain in holdings value after stock jumped 6.1% last week

Key Insights

• Significant control over China International Capital by sovereign wealth funds implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 4 shareholders
• 10% of China International Capital is held by Institutions

Every investor in China International Capital Corporation Limited (HKG:3908) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are sovereign wealth funds with 40% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, sovereign wealth funds were the biggest beneficiaries of last week’s 6.1% gain.

In the chart below, we zoom in on the different ownership groups of China International Capital.

View our latest analysis for China International Capital

What Does The Institutional Ownership Tell Us About China International Capital?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

China International Capital already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 China International Capital, (below). Of course, keep in mind that there are other factors to consider, too.

China International Capital is not owned by hedge funds. Our data shows that Central Huijin Investment Ltd. is the largest shareholder with 40% of shares outstanding. The second and third largest shareholders are Alibaba Group Holding Limited and Tencent Holdings Limited, with an equal amount of shares to their name at 4.5%.

On looking further, we found that 51% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China International Capital

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.

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 China International Capital Corporation Limited insiders own under 1% of the company. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It is a very large company, so it would be surprising to see insiders own a large proportion of the company. Though their holding amounts to less than 1%, we can see that board members collectively own HK$4.6m worth of shares (at current prices). Arguably recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China International Capital. 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.

Public Company Ownership

It appears to us that public companies own 9.0% of China International Capital. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that China International Capital is showing 1 warning sign in our investment analysis , you should know about...

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.