What Is The Ownership Structure Like For First Pacific Company Limited (HKG:142)?

By
Simply Wall St
Published
February 23, 2022
SEHK:142
Source: Shutterstock

A look at the shareholders of First Pacific Company Limited (HKG:142) can tell us which group is most powerful. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

First Pacific isn't enormous, but it's not particularly small either. It has a market capitalization of HK$14b, which means it would generally expect to see some institutions on the share registry. In the chart below, we can see that institutional investors have bought into the company. We can zoom in on the different ownership groups, to learn more about First Pacific.

View our latest analysis for First Pacific

ownership-breakdown
SEHK:142 Ownership Breakdown February 23rd 2022

What Does The Institutional Ownership Tell Us About First Pacific?

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.

We can see that First Pacific does have institutional investors; and they hold a good portion of the company's stock. 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. 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 First Pacific, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:142 Earnings and Revenue Growth February 23rd 2022

We note that hedge funds don't have a meaningful investment in First Pacific. Our data shows that Anthoni Salim is the largest shareholder with 27% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 8.1% of the stock. Furthermore, CEO Manuel Pangilinan is the owner of 1.7% of the company's shares.

After doing some more digging, we found that the top 3 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of First Pacific

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

It seems insiders own a significant proportion of First Pacific Company Limited. It has a market capitalization of just HK$14b, and insiders have HK$4.0b worth of shares in their own names. That's quite significant. 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

The general public, who are usually individual investors, hold a 33% stake in First Pacific. 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 19%, of the shares on issue. 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:

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 First Pacific (at least 1 which is a bit unpleasant) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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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