Kuaishou Technology (HKG:1024) surges 20%; retail investors who own 39% shares profited along with institutions

Key Insights

• Kuaishou Technology's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 14 investors have a majority stake in the company with 50% ownership
• 20% of Kuaishou Technology is held by insiders

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A look at the shareholders of Kuaishou Technology (HKG:1024) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While retail investors were the group that reaped the most benefits after last week’s 20% price gain, institutions also received a 25% cut.

Let's delve deeper into each type of owner of Kuaishou Technology, beginning with the chart below.

Check out our latest analysis for Kuaishou Technology

What Does The Institutional Ownership Tell Us About Kuaishou Technology?

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.

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. 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 Kuaishou Technology's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Kuaishou Technology. Looking at our data, we can see that the largest shareholder is Tencent Holdings Limited with 16% of shares outstanding. For context, the second largest shareholder holds about 10% of the shares outstanding, followed by an ownership of 9.0% by the third-largest shareholder. 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.

A closer look at our ownership figures suggests that the top 14 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 Kuaishou 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.

It seems insiders own a significant proportion of Kuaishou Technology. It is very interesting to see that insiders have a meaningful HK$51b stake in this HK$262b business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

It appears to us that public companies own 16% of Kuaishou Technology. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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 like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

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.