How Much Of Kangqiao Service Group Limited (HKG:2205) Do Insiders Own?

By
Simply Wall St
Published
March 15, 2022
SEHK:2205
Source: Shutterstock

Every investor in Kangqiao Service Group Limited (HKG:2205) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

Kangqiao Service Group is not a large company by global standards. It has a market capitalization of HK$2.2b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions are not on the share registry. We can zoom in on the different ownership groups, to learn more about Kangqiao Service Group.

See our latest analysis for Kangqiao Service Group

ownership-breakdown
SEHK:2205 Ownership Breakdown March 15th 2022

What Does The Lack Of Institutional Ownership Tell Us About Kangqiao Service Group?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Kangqiao Service Group, for yourself, below.

earnings-and-revenue-growth
SEHK:2205 Earnings and Revenue Growth March 15th 2022

Hedge funds don't have many shares in Kangqiao Service Group. Looking at our data, we can see that the largest shareholder is Gewei Song with 71% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With an ownership of 3.8%, the second largest shareholder is Rulin Zhang

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Kangqiao Service Group

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own the majority of Kangqiao Service Group Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$2.2b, that means they have HK$1.6b 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

The general public-- including retail investors -- own 25% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kangqiao Service Group better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Of course this may not be the best stock to buy. So take a peek at this free 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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