Sovereign wealth funds are China International Capital Corporation Limited's (HKG:3908) biggest owners and were rewarded after market cap rose by HK$2.9b last week

Key Insights

• The considerable ownership by sovereign wealth funds in China International Capital indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 53% of the company
• 13% of China International Capital is held by Institutions

A look at the shareholders of China International Capital Corporation Limited (HKG:3908) can tell us which group is most powerful. The group holding the most number of shares in the company, around 40% to be precise, is sovereign wealth funds. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, sovereign wealth funds benefitted the most after the company's market cap rose by HK$2.9b last week.

Let's delve deeper into each type of owner of China International Capital, beginning with the chart below.

Check out our latest analysis for China International Capital

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

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 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. 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 International Capital'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 International Capital. Central Huijin Investment Ltd. is currently 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 53% 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

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.

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. But they may have an indirect interest through a corporate structure that we haven't picked up on. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$201m of stock. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in China International Capital. 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

Our data indicates that Private Companies hold 6.8%, 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.

Public Company Ownership

We can see that public companies hold 9.0% of the China International Capital shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China International Capital better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

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.