In spite of recent selling, insiders at Centenary United Holdings Limited (HKG:1959) are the largest shareholders; own 72% shares

Key Insights

• Significant insider control over Centenary United Holdings implies vested interests in company growth
• Hau Kit Law owns 72% of the company
• Insiders have sold recently

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Every investor in Centenary United Holdings Limited (HKG:1959) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 72% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Insiders are at the top of the company's shareholdings despite selling some shares recently. As a result, they were also the biggest winners as market cap hit HK$900m last week.

In the chart below, we zoom in on the different ownership groups of Centenary United Holdings.

Check out our latest analysis for Centenary United Holdings

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

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 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 Centenary United Holdings, for yourself, below.

We note that hedge funds don't have a meaningful investment in Centenary United Holdings. With a 72% stake, CEO Hau Kit Law is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. With an ownership of 0.06%, the second largest shareholder is Huaquan Chen, who also hold the title of Co-Chief Operating Officer.

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. 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 Centenary United Holdings

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 Centenary United Holdings Limited stock. This gives them a lot of power. That means they own HK$645m worth of shares in the HK$900m company. That's quite meaningful. 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

With a 28% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Centenary United 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for Centenary United Holdings you should be aware of, and 2 of them can't be ignored.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. 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.