Huijing Holdings Company Limited's (HKG:9968) top holders are insiders and they are likely disappointed by the recent 4.8% drop

By
Simply Wall St
Published
March 15, 2022
SEHK:9968
Source: Shutterstock

If you want to know who really controls Huijing Holdings Company Limited (HKG:9968), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 85% 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.

And following last week's 4.8% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Huijing Holdings, beginning with the chart below.

Check out our latest analysis for Huijing Holdings

ownership-breakdown
SEHK:9968 Ownership Breakdown March 15th 2022

What Does The Lack Of Institutional Ownership Tell Us About Huijing Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. 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 Huijing Holdings, for yourself, below.

earnings-and-revenue-growth
SEHK:9968 Earnings and Revenue Growth March 15th 2022

We note that hedge funds don't have a meaningful investment in Huijing Holdings. Looking at our data, we can see that the largest shareholder is Ruixiang Lun with 85% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Meanwhile, the second and third largest shareholders, hold 0.07% and 0.07%, of the shares outstanding, respectively.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Huijing Holdings

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.

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 most recent data indicates that insiders own the majority of Huijing Holdings Company Limited. This means they can collectively make decisions for the company. Insiders own HK$8.0b worth of shares in the HK$9.4b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public, who are usually individual investors, hold a 15% stake in Huijing Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Huijing Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for Huijing Holdings you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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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