Kangji Medical Holdings Limited's (HKG:9997) CEO Ming Zhong is the most upbeat insider, and their holdings increased by 9.1% last week

By
Simply Wall St
Published
January 17, 2022
SEHK:9997
Source: Shutterstock

Every investor in Kangji Medical Holdings Limited (HKG:9997) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by HK$909m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Kangji Medical Holdings.

Check out our latest analysis for Kangji Medical Holdings

ownership-breakdown
SEHK:9997 Ownership Breakdown January 17th 2022

What Does The Institutional Ownership Tell Us About Kangji Medical Holdings?

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.

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

earnings-and-revenue-growth
SEHK:9997 Earnings and Revenue Growth January 17th 2022

Hedge funds don't have many shares in Kangji Medical Holdings. The company's CEO Ming Zhong is the largest shareholder with 33% of shares outstanding. In comparison, the second and third largest shareholders hold about 19% and 1.8% of the stock. Interestingly, the second-largest shareholder, Yinguang Shentu is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kangji Medical Holdings

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 insiders own more than half of Kangji Medical Holdings Limited. This gives them effective control of the company. Given it has a market cap of HK$11b, that means insiders have a whopping HK$5.6b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Kangji Medical Holdings. 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.

Private Equity Ownership

With a stake of 17%, private equity firms could influence the Kangji Medical Holdings board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Next Steps:

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

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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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