State or government among The People's Insurance Company (Group) of China Limited's (HKG:1339) largest stockholders and were hit after last week's 7.4% price drop

Key Insights

• The considerable ownership by state or government in People's Insurance Company (Group) of China indicates that they collectively have a greater say in management and business strategy
• 61% of the company is held by a single shareholder (Ministry of Finance of the People's Republic of China)
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

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To get a sense of who is truly in control of The People's Insurance Company (Group) of China Limited (HKG:1339), it is important to understand the ownership structure of the business. With 61% stake, state or government possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, state or government endured the biggest losses as the stock fell by 7.4%.

Let's delve deeper into each type of owner of People's Insurance Company (Group) of China, beginning with the chart below.

View our latest analysis for People's Insurance Company (Group) of China

What Does The Institutional Ownership Tell Us About People's Insurance Company (Group) of China?

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.

People's Insurance Company (Group) of China already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 People's Insurance Company (Group) of China's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in People's Insurance Company (Group) of China. Looking at our data, we can see that the largest shareholder is Ministry of Finance of the People's Republic of China with 61% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. National Council for Social Security Fund is the second largest shareholder owning 13% of common stock, and Capital Research and Management Company holds about 1.0% of the company stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of People's Insurance Company (Group) of China

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. 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.

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 data suggests that insiders own under 1% of The People's Insurance Company (Group) of China Limited in their own names. As it is a large company, we'd only expect insiders to own a small percentage of it. But it's worth noting that they own HK$708m worth of shares. In this sort of situation, it can be more interesting to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in People's Insurance Company (Group) of China. 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. Case in point: We've spotted 2 warning signs for People's Insurance Company (Group) of China you should be aware of, and 1 of them doesn't sit too well with us.

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.