Stock Analysis

The recent HK$408m market cap decrease is likely to have disappointed insiders invested in LVGEM (China) Real Estate Investment Company Limited (HKG:95)

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SEHK:95
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A look at the shareholders of LVGEM (China) Real Estate Investment Company Limited (HKG:95) can tell us which group is most powerful. The group holding the most number of shares in the company, around 71% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders as a group endured the highest losses after market cap fell by HK$408m.

Let's take a closer look to see what the different types of shareholders can tell us about LVGEM (China) Real Estate Investment.

Check out our latest analysis for LVGEM (China) Real Estate Investment

ownership-breakdown
SEHK:95 Ownership Breakdown September 9th 2022

What Does The Institutional Ownership Tell Us About LVGEM (China) Real Estate Investment?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in LVGEM (China) Real Estate Investment. 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 LVGEM (China) Real Estate Investment's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SEHK:95 Earnings and Revenue Growth September 9th 2022

LVGEM (China) Real Estate Investment is not owned by hedge funds. The company's largest shareholder is Hong King Wong, with ownership of 66%. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 5.9% and 4.9% of the stock.

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 LVGEM (China) Real Estate Investment

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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.

It seems that insiders own more than half the LVGEM (China) Real Estate Investment Company Limited stock. This gives them a lot of power. Given it has a market cap of HK$4.4b, that means they have HK$3.1b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 17% ownership, the general public, mostly comprising of individual investors, have some degree of sway over LVGEM (China) Real Estate Investment. 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

Public companies currently own 5.9% of LVGEM (China) Real Estate Investment stock. 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:

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. To that end, you should learn about the 4 warning signs we've spotted with LVGEM (China) Real Estate Investment (including 2 which are potentially serious) .

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.

Valuation is complex, but we're helping make it simple.

Find out whether LVGEM (China) Real Estate Investment is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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About SEHK:95

LVGEM (China) Real Estate Investment

LVGEM (China) Real Estate Investment Company Limited, an investment holding company, engages in property development and investment businesses in the People’s Republic of China.

The Snowflake is a visual investment summary with the score of each axis being calculated by 6 checks in 5 areas.

Analysis AreaScore (0-6)
Valuation2
Future Growth2
Past Performance1
Financial Health3
Dividends0

Read more about these checks in the individual report sections or in our analysis model.

Mediocre balance sheet and slightly overvalued.