A HK$412m drop in the market cap of Qi-House Holdings Limited (HKG:8395) is not what insiders like to see after purchasing shares recently

Key Insights

• Significant insider control over Qi-House Holdings implies vested interests in company growth
• The largest shareholder of the company is Tang Tong with a 51% stake
• Recent purchases by insiders

If you want to know who really controls Qi-House Holdings Limited (HKG:8395), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 71% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

A quick look at our data suggests that insiders have been buying shares in the company recently. Their expectations, however, were not satisfied, as the market cap dropped to HK$871m over the past week.

In the chart below, we zoom in on the different ownership groups of Qi-House Holdings.

See our latest analysis for Qi-House Holdings

What Does The Lack Of Institutional Ownership Tell Us About Qi-House Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. 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 Qi-House Holdings, for yourself, below.

Qi-House Holdings is not owned by hedge funds. With a 51% stake, CEO Tang Tong is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 8.4% and 7.0% of the shares outstanding respectively, Yang Songmei and Qiang Xu are the second and third largest shareholders.

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. 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 Qi-House 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 information suggests that insiders own more than half of Qi-House Holdings Limited. This gives them effective control of the company. Given it has a market cap of HK$871m, that means they have HK$616m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Qi-House 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. Be aware that Qi-House Holdings is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

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.