Stock Analysis

Chengze Wu Homeland Interactive Technology Ltd.'s (HKG:3798) CEO is the most bullish insider, and their stock value gained 10.0%last week

Published
SEHK:3798

Key Insights

  • Insiders appear to have a vested interest in Homeland Interactive Technology's growth, as seen by their sizeable ownership
  • 53% of the business is held by the top 3 shareholders
  • Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Homeland Interactive Technology Ltd. (HKG:3798) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 67% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders were the biggest beneficiaries of last week’s 10.0% gain.

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

See our latest analysis for Homeland Interactive Technology

SEHK:3798 Ownership Breakdown September 3rd 2023

What Does The Lack Of Institutional Ownership Tell Us About Homeland Interactive Technology?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Homeland Interactive Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:3798 Earnings and Revenue Growth September 3rd 2023

Hedge funds don't have many shares in Homeland Interactive Technology. The company's CEO Chengze Wu is the largest shareholder with 34% of shares outstanding. Bo Su is the second largest shareholder owning 9.5% of common stock, and Mingkuan Jiang holds about 8.8% of the company stock. Interestingly, the second-largest shareholder, Bo Su is also Chief Investment Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Homeland Interactive Technology

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

It seems that insiders own more than half the Homeland Interactive Technology Ltd. stock. This gives them a lot of power. Given it has a market cap of HK$2.2b, that means they have HK$1.5b worth of shares. 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, who are usually individual investors, hold a 27% stake in Homeland Interactive Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

Private equity firms hold a 5.6% stake in Homeland Interactive Technology. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. To that end, you should learn about the 2 warning signs we've spotted with Homeland Interactive Technology (including 1 which can't be ignored) .

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.

Valuation is complex, but we're here to simplify it.

Discover if Homeland Interactive Technology might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.

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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.