Following recent decline, Goldin Financial Holdings Limited's (HKG:530) top shareholder Top Key Executive Sutong Pan sees holdings value drop by 10%

By
Simply Wall St
Published
March 16, 2022
SEHK:530
Source: Shutterstock

If you want to know who really controls Goldin Financial Holdings Limited (HKG:530), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 68% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 10% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Goldin Financial Holdings, beginning with the chart below.

Check out our latest analysis for Goldin Financial Holdings

ownership-breakdown
SEHK:530 Ownership Breakdown March 16th 2022

What Does The Lack Of Institutional Ownership Tell Us About Goldin Financial Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Goldin Financial Holdings, for yourself, below.

earnings-and-revenue-growth
SEHK:530 Earnings and Revenue Growth March 16th 2022

We note that hedge funds don't have a meaningful investment in Goldin Financial Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Goldin Financial Holdings' case, its Top Key Executive, Sutong Pan, is the largest shareholder, holding 68% of shares outstanding. With an ownership of 2.7%, the second largest shareholder is Goldin Real Estate Financial Holdings Limited

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Goldin Financial Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own the majority of Goldin Financial Holdings Limited. This means they can collectively make decisions for the company. So they have a HK$672m stake in this HK$986m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Goldin Financial Holdings (1 shouldn't be ignored!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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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