Why China 33 Media Group Limited’s (HKG:8087) Ownership Structure Is Important

In this article, I will take a quick look at China 33 Media Group Limited’s (HKG:8087) recent ownership structure – an unconventional investing subject, but an important one. Ownership structure has been found to have an impact on shareholder returns in both short- and long-term. The same amount of capital coming from an activist institution and a passive mutual fund has different implications on corporate governance, which is a decisive factor for a long-term investor. It also impacts the trading environment of company shares, which is more of a concern for short-term investors. Now I will analyze 8087’s shareholder registry in more detail.

See our latest analysis for China 33 Media Group

SEHK:8087 Ownership Summary August 10th 18
SEHK:8087 Ownership Summary August 10th 18

Institutional Ownership

Institutional investors transact in large blocks which can influence the momentum of stock prices, at least in the short-term, especially when there is a low level of public shares available on the market to trade. With an institutional ownership of 7.01%, 8087 doesn’t seem too exposed to higher volatility resulting from institutional trading.

General Public Ownership

The general public holds a substantial 82.99% stake in 8087, making it a highly popular stock among retail investors. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses.

Private Company Ownership

Another group of owners that a potential investor in 8087 should consider are private companies, with a stake of 10.00%. While they invest more often due to strategic interests, an investment can also be driven by capital gains through share price appreciation. This kind of ownership, if predominantly strategic, can give these companies a significant power to affect 8087’s business strategy. Thus, potential investors should look into these business relations and check how it can impact long-term shareholder returns.

Next Steps:

With a low level of institutional ownership, investors in 8087 need not worry about non-fundamental factors such as ownership structure causing large impact on stock prices. However, if you are building an investment case for 8087, ownership structure alone should not dictate your decision to buy or sell the stock. Instead, you should be evaluating company-specific factors such as China 33 Media Group’s past track record and financial health. I highly recommend you to complete your research by taking a look at the following:

  1. Financial Health: Are 8087’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
  2. Past Track Record: Has 8087 been consistently performing well irrespective of the ups and downs in the market? Go into more detail in the past performance analysis and take a look at the free visual representations of 8087’s historicals for more clarity.
  3. Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.