After losing 31% in the past year, Kingdee International Software Group Company Limited (HKG:268) institutional owners must be relieved by the recent gain

Key Insights

• Given the large stake in the stock by institutions, Kingdee International Software Group's stock price might be vulnerable to their trading decisions
• 50% of the business is held by the top 15 shareholders
• 20% of Kingdee International Software Group is held by insiders

To get a sense of who is truly in control of Kingdee International Software Group Company Limited (HKG:268), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 45% to be precise, is institutions. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Last week's HK$1.8b market cap gain would probably be appreciated by institutional investors, especially after a year of 31% losses.

Let's delve deeper into each type of owner of Kingdee International Software Group, beginning with the chart below.

View our latest analysis for Kingdee International Software Group

What Does The Institutional Ownership Tell Us About Kingdee International Software Group?

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.

As you can see, institutional investors have a fair amount of stake in Kingdee International Software Group. 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 Kingdee International Software Group's earnings history below. Of course, the future is what really matters.

Kingdee International Software Group is not owned by hedge funds. With a 20% stake, CEO Shao Chun Xu is the largest shareholder. The second and third largest shareholders are BlackRock, Inc. and Capital Research and Management Company, with an equal amount of shares to their name at 4.7%.

A closer look at our ownership figures suggests that the top 15 shareholders have a combined ownership of 50% implying that no single shareholder has a majority.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kingdee International Software Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own a reasonable proportion of Kingdee International Software Group Company Limited. It has a market capitalization of just HK$33b, and insiders have HK$6.4b worth of shares in their own names. That's quite significant. 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

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kingdee International Software Group. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Kingdee International Software Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Kingdee International Software Group , and understanding them should be part of your investment process.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.

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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.