Private companies invested in Great Eagle Holdings Limited (HKG:41) copped the brunt of last week's HK$449m market cap decline

Key Insights

• Significant control over Great Eagle Holdings by private companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 64% ownership
• Insider ownership in Great Eagle Holdings is 29%

To get a sense of who is truly in control of Great Eagle Holdings Limited (HKG:41), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 42% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders, who own 29% shares weren’t spared from last week’s HK$449m market cap drop, private companies as a group suffered the maximum losses

Let's delve deeper into each type of owner of Great Eagle Holdings, beginning with the chart below.

See our latest analysis for Great Eagle Holdings

What Does The Institutional Ownership Tell Us About Great Eagle Holdings?

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.

Great Eagle Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Great Eagle Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Great Eagle Holdings. The company's largest shareholder is Lo Family Trust, with ownership of 42%. In comparison, the second and third largest shareholders hold about 22% and 6.0% of the stock. Ka Shui Lo, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Great Eagle Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Our most recent data indicates that insiders own a reasonable proportion of Great Eagle Holdings Limited. Insiders own HK$2.5b worth of shares in the HK$8.5b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 15% 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.

Private Company Ownership

We can see that Private Companies own 42%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Great Eagle Holdings better, we need to consider many other factors. To that end, you should learn about the 4 warning signs we've spotted with Great Eagle Holdings (including 1 which is potentially serious) .

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.