Can We See Significant Institutional Ownership On The Yuexiu Real Estate Investment Trust (HKG:405) Share Register?

Every investor in Yuexiu Real Estate Investment Trust (HKG:405) should be aware of the most powerful shareholder groups. Institutions will often hold stock in bigger companies, and we expect to see insiders owning a noticeable percentage of the smaller ones. Companies that have been privatized tend to have low insider ownership.

Yuexiu Real Estate Investment Trust isn’t enormous, but it’s not particularly small either. It has a market capitalization of HK$11b, which means it would generally expect to see some institutions on the share registry. Taking a look at our data on the ownership groups (below), it’s seems that institutional investors have bought into the company. Let’s take a closer look to see what the different types of shareholder can tell us about Yuexiu Real Estate Investment Trust.

Check out our latest analysis for Yuexiu Real Estate Investment Trust

SEHK:405 Ownership Summary June 1st 2020
SEHK:405 Ownership Summary June 1st 2020

What Does The Institutional Ownership Tell Us About Yuexiu Real Estate Investment Trust?

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.

We can see that Yuexiu Real Estate Investment Trust does have institutional investors; and they hold 6.2% of the stock. 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. 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 Yuexiu Real Estate Investment Trust’s earnings history, below. Of course, the future is what really matters.

SEHK:405 Income Statement June 1st 2020
SEHK:405 Income Statement June 1st 2020

Yuexiu Real Estate Investment Trust is not owned by hedge funds. The company’s largest shareholder is Yuexiu Property Company Limited, with ownership of 53%, With such a huge stake in the ownership, we infer that they have significant control of the future of the company. The second and third largest shareholders are The Vanguard Group, Inc. and Sumitomo Mitsui DS Asset Management Company, Limited, holding 1.5% and 0.9%, respectively.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Yuexiu Real Estate Investment Trust

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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 less than 1% of Yuexiu Real Estate Investment Trust. Keep in mind that it’s a big company, and the insiders own HK$17k worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public holds a 41% stake in 405. 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

It appears to us that public companies own 53% of 405. 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand Yuexiu Real Estate Investment Trust better, we need to consider many other factors. For instance, we’ve identified 6 warning signs for Yuexiu Real Estate Investment Trust (2 are potentially serious) that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

Love or hate this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com.

This article by Simply Wall St is general in nature. 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. Thank you for reading.