Do Insiders Own Shares In China Ludao Technology Company Limited (HKG:2023)?

If you want to know who really controls China Ludao Technology Company Limited (HKG:2023), then you’ll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. 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.’

China Ludao Technology is not a large company by global standards. It has a market capitalization of HK$546m, which means it wouldn’t have the attention of many institutional investors. In the chart below below, we can see that institutions are not on the share registry. Let’s delve deeper into each type of owner, to discover more about 2023.

See our latest analysis for China Ludao Technology

SEHK:2023 Ownership Summary, April 19th 2019
SEHK:2023 Ownership Summary, April 19th 2019

What Does The Lack Of Institutional Ownership Tell Us About China Ludao Technology?

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

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don’t attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. Alternatively, there might be something about the company that has kept institutional investors away. China Ludao Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:2023 Income Statement, April 19th 2019
SEHK:2023 Income Statement, April 19th 2019

China Ludao Technology is not owned by hedge funds. As far I can tell there isn’t analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of China Ludao Technology

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

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in China Ludao Technology Company Limited. It has a market capitalization of just HK$546m, and insiders have HK$245m worth of shares in their own names. I would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are mostly retail investors, collectively hold 53% of China Ludao Technology shares. With this size of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to decline an acquisition or merger that may not improve profitability.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand China Ludao Technology better, we need to consider many other factors.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.