What Is The Ownership Structure Like For Modern Land (China) Co., Limited (HKG:1107)?

The big shareholder groups in Modern Land (China) Co., Limited (HKG:1107) have power over the company. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Modern Land (China) is not a large company by global standards. It has a market capitalization of HK$2.8b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions own shares in the company. We can zoom in on the different ownership groups, to learn more about Modern Land (China).

Check out our latest analysis for Modern Land (China)

What Does The Institutional Ownership Tell Us About Modern Land (China)?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Modern Land (China) does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Modern Land (China)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Modern Land (China). Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Modern Land (China)'s case, its Top Key Executive, Lei Zhang, is the largest shareholder, holding 66% of shares outstanding. With 9.6% and 6.8% of the shares outstanding respectively, China Cinda (HK) Asset Management Co., Limited and China Great Wall Asset Management Corporation, Asset Management Arm are the second and third largest shareholders.

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 Modern Land (China)

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.

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 information suggests that insiders own more than half of Modern Land (China) Co., Limited. This gives them effective control of the company. That means they own HK$1.9b worth of shares in the HK$2.8b company. That's quite meaningful. 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

The general public holds a 16% stake in Modern Land (China). 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 Equity Ownership

With a stake of 9.6%, private equity firms could influence the Modern Land (China) board. 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. Be aware that Modern Land (China) is showing 4 warning signs in our investment analysis , and 2 of those are potentially serious...

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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