Uni-President China Holdings Ltd's (HKG:220) market cap dropped HK$1.3b last week; individual investors who hold 73% were hit as were institutions

Key Insights

• Uni-President China Holdings' significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• Uni-President Enterprises Corp. owns 73% of the company
• Institutions own 14% of Uni-President China Holdings

To get a sense of who is truly in control of Uni-President China Holdings Ltd (HKG:220), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are public companies with 73% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While institutions who own 14% came under pressure after market cap dropped to HK$30b last week,public companies took the most losses.

In the chart below, we zoom in on the different ownership groups of Uni-President China Holdings.

View our latest analysis for Uni-President China Holdings

What Does The Institutional Ownership Tell Us About Uni-President China Holdings?

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.

Uni-President China Holdings 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. 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 Uni-President China Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Uni-President China Holdings is not owned by hedge funds. Our data shows that Uni-President Enterprises Corp. is the largest shareholder with 73% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. In comparison, the second and third largest shareholders hold about 1.9% and 1.1% of the stock.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Uni-President China Holdings

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.

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 information suggests that Uni-President China Holdings Ltd insiders own under 1% of the company. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own HK$2.2m worth of shares. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 13% 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.

Public Company Ownership

We can see that public companies hold 73% of the Uni-President China Holdings 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 Uni-President China Holdings better, we need to consider many other factors. Take risks for example - Uni-President China Holdings has 2 warning signs we think you should be aware of.

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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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.