Lee & Man Paper Manufacturing Limited's (HKG:2314) largest shareholder, Top Key Executive Man Chun Lee sees holdings value fall by 3.5% following recent drop

Key Insights

• Insiders appear to have a vested interest in Lee & Man Paper Manufacturing's growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 63% ownership
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of Lee & Man Paper Manufacturing Limited (HKG:2314) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 73% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 3.5%.

Let's delve deeper into each type of owner of Lee & Man Paper Manufacturing, beginning with the chart below.

Check out our latest analysis for Lee & Man Paper Manufacturing

What Does The Institutional Ownership Tell Us About Lee & Man Paper Manufacturing?

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.

Lee & Man Paper Manufacturing already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Lee & Man Paper Manufacturing's historic earnings and revenue below, but keep in mind there's always more to the story.

Lee & Man Paper Manufacturing is not owned by hedge funds. From our data, we infer that the largest shareholder is Man Chun Lee (who also holds the title of Top Key Executive) with 32% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 32% and 9.9% of the shares outstanding respectively, Man Bun Lee and Wan Lee are the second and third largest shareholders. Interestingly, the second-largest shareholder, Man Bun Lee is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Lee & Man Paper Manufacturing

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.

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.

It seems that insiders own more than half the Lee & Man Paper Manufacturing Limited stock. This gives them a lot of power. Given it has a market cap of HK$14b, that means insiders have a whopping HK$11b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 19% stake in the company, and hence can't easily be ignored. 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:

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 3 warning signs for Lee & Man Paper Manufacturing that you should be aware of before investing here.

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.