What Kind Of Investors Own Most Of Overseas Chinese Town (Asia) Holdings Limited (HKG:3366)?

By
Simply Wall St
Published
May 25, 2021
SEHK:3366
Source: Shutterstock

The big shareholder groups in Overseas Chinese Town (Asia) Holdings Limited (HKG:3366) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

With a market capitalization of HK$1.2b, Overseas Chinese Town (Asia) Holdings is a small cap stock, so it might not be well known by many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. Let's delve deeper into each type of owner, to discover more about Overseas Chinese Town (Asia) Holdings.

View our latest analysis for Overseas Chinese Town (Asia) Holdings

ownership-breakdown
SEHK:3366 Ownership Breakdown May 26th 2021

What Does The Institutional Ownership Tell Us About Overseas Chinese Town (Asia) Holdings?

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.

As you can see, institutional investors have a fair amount of stake in Overseas Chinese Town (Asia) Holdings. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Overseas Chinese Town (Asia) Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SEHK:3366 Earnings and Revenue Growth May 26th 2021

We note that hedge funds don't have a meaningful investment in Overseas Chinese Town (Asia) Holdings. Our data shows that Shenzhen Overseas Chinese Town Co.,Ltd. is the largest shareholder with 71% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. For context, the second largest shareholder holds about 4.7% of the shares outstanding, followed by an ownership of 0.6% by the third-largest shareholder.

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. 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 Overseas Chinese Town (Asia) Holdings

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. 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.

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 data suggests that insiders own under 1% of Overseas Chinese Town (Asia) Holdings Limited in their own names. It appears that the board holds about HK$1.6m worth of stock. This compares to a market capitalization of HK$1.2b. I generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, with a 24% stake in the company, will not 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.

Public Company Ownership

We can see that public companies hold 71% of the Overseas Chinese Town (Asia) Holdings shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Overseas Chinese Town (Asia) Holdings that you should be aware of before investing here.

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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