Hengan International Group Company Limited (HKG:1044) boasts of bullish insider sentiment with 45% ownership and they have been buying lately

Key Insights

• Hengan International Group's significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 4 shareholders
• Insiders have bought recently

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To get a sense of who is truly in control of Hengan International Group Company Limited (HKG:1044), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual insiders with 45% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

A quick look at our data suggests that insiders have been buying shares in the company recently. This might indicate that they expect share prices to rise in the near future.

Let's take a closer look to see what the different types of shareholders can tell us about Hengan International Group.

View our latest analysis for Hengan International Group

What Does The Institutional Ownership Tell Us About Hengan International Group?

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 Hengan International Group 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Hengan International Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hengan International Group is not owned by hedge funds. With a 24% stake, CEO Ching Lau Hui is the largest shareholder. With 21% and 4.9% of the shares outstanding respectively, Man Bok Sze and Lazard Asset Management LLC are the second and third largest shareholders. Interestingly, the second-largest shareholder, Man Bok Sze is also Top Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Hengan International Group

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. 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.

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 insiders maintain a significant holding in Hengan International Group Company Limited. Insiders own HK$14b worth of shares in the HK$32b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Hengan International Group. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hengan International Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Hengan International Group you should be aware of.

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.