Top Key Executive Sze Lim Li, Guangzhou R&F Properties Co., Ltd.'s (HKG:2777) largest shareholder sees value of holdings go down 17% after recent drop

Key Insights

• Insiders appear to have a vested interest in Guangzhou R&F Properties' growth, as seen by their sizeable ownership
• 56% of the business is held by the top 2 shareholders
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

A look at the shareholders of Guangzhou R&F Properties Co., Ltd. (HKG:2777) can tell us which group is most powerful. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to HK$5.6b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Guangzhou R&F Properties.

See our latest analysis for Guangzhou R&F Properties

What Does The Institutional Ownership Tell Us About Guangzhou R&F Properties?

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.

Institutions have a very small stake in Guangzhou R&F Properties. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Guangzhou R&F Properties is not owned by hedge funds. Our data suggests that Sze Lim Li, who is also the company's Top Key Executive, holds the most number of shares at 29%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Li Zhang is the second largest shareholder owning 28% of common stock, and The Vanguard Group, Inc. holds about 1.9% of the company stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Guangzhou R&F Properties

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.

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 Guangzhou R&F Properties Co., Ltd. stock. This gives them a lot of power. Given it has a market cap of HK$5.6b, that means they have HK$3.2b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Guangzhou R&F Properties. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Guangzhou R&F Properties better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Guangzhou R&F Properties , and understanding them should be part of your investment process.

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.