Lee & Man Paper Manufacturing Limited's (HKG:2314) Top Key Executive Man Chun Lee is the most upbeat insider, and their holdings increased by 5.6% last week

Key Insights

• Lee & Man Paper Manufacturing's significant insider ownership suggests inherent interests in company's expansion
• 62% of the business is held by the top 2 shareholders
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Lee & Man Paper Manufacturing Limited (HKG:2314), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 73% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit HK$10b market cap following a 5.6% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Lee & Man Paper Manufacturing.

See our latest analysis for Lee & Man Paper Manufacturing

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

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Less than 5% of Lee & Man Paper Manufacturing is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Lee & Man Paper Manufacturing. 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. Man Bun Lee is the second largest shareholder owning 30% of common stock, and Wan Lee holds about 11% of the company stock. 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.

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.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

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. 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 own more than half of Lee & Man Paper Manufacturing Limited. This gives them effective control of the company. Given it has a market cap of HK$10b, that means insiders have a whopping HK$7.7b 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-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should learn about the 2 warning signs we've spotted with Lee & Man Paper Manufacturing (including 1 which is a bit unpleasant) .

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.