Individual investors who hold 37% of Kuaishou Technology (HKG:1024) gained 6.1%, institutions profited as well

Key Insights

• Significant control over Kuaishou Technology by individual investors implies that the general public has more power to influence management and governance-related decisions
• The top 10 shareholders own 51% of the company
• 19% of Kuaishou Technology is held by insiders

To get a sense of who is truly in control of Kuaishou Technology (HKG:1024), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 6.1% increase in the stock price last week, individual investors profited the most, but institutions who own 28% stock also stood to gain from the increase.

In the chart below, we zoom in on the different ownership groups of Kuaishou Technology.

View our latest analysis for Kuaishou Technology

What Does The Institutional Ownership Tell Us About Kuaishou Technology?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Kuaishou Technology 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kuaishou Technology, (below). Of course, keep in mind that there are other factors to consider, too.

Kuaishou Technology is not owned by hedge funds. Tencent Holdings Limited is currently the largest shareholder, with 16% of shares outstanding. With 9.8% and 8.8% of the shares outstanding respectively, Hua Su and Yixiao Cheng are the second and third largest shareholders. Two of the top three shareholders happen to be Top Key Executive and Chairman of the Board, respectively. That is, insiders feature higher up in the heirarchy of the company's top shareholders.

We also observed that the top 10 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

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 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 Kuaishou Technology

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

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.

It seems insiders own a significant proportion of Kuaishou Technology. Insiders own HK$38b worth of shares in the HK$196b 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 Kuaishou Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 16% of the Kuaishou Technology shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

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

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.