Public companies who hold 56% of Lai Sun Development Company Limited (HKG:488) gained 12%, insiders profited as well

Key Insights

• Lai Sun Development's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 56% of the company is held by a single shareholder (Lai Sun Garment (International) Limited)
• 19% of Lai Sun Development is held by insiders

A look at the shareholders of Lai Sun Development Company Limited (HKG:488) can tell us which group is most powerful. We can see that public companies own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Public companies gained the most after market cap touched HK$959m last week, while insiders who own 19% also benefitted.

Let's take a closer look to see what the different types of shareholders can tell us about Lai Sun Development.

Check out our latest analysis for Lai Sun Development

What Does The Lack Of Institutional Ownership Tell Us About Lai Sun Development?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Lai Sun Development might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Lai Sun Development is not owned by hedge funds. Our data shows that Lai Sun Garment (International) Limited is the largest shareholder with 56% of shares outstanding. This implies that they have majority interest control of the future of the company. The second and third largest shareholders are Siu Yuk Yu and Cheuk Yi Yu, with an equal amount of shares to their name at 9.5%.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Lai Sun Development

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our information suggests that insiders maintain a significant holding in Lai Sun Development Company Limited. Insiders own HK$185m worth of shares in the HK$959m company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 14% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Lai Sun Development. 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 11%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 56% of Lai Sun Development. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Lai Sun Development better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Lai Sun Development .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.