What You Need To Know About S.A.S. Dragon Holdings Limited's (HKG:1184) Investor Composition

By
Simply Wall St
Published
May 31, 2021
SEHK:1184
Source: Shutterstock

If you want to know who really controls S.A.S. Dragon Holdings Limited (HKG:1184), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

S.A.S. Dragon Holdings is not a large company by global standards. It has a market capitalization of HK$2.0b, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about S.A.S. Dragon Holdings.

View our latest analysis for S.A.S. Dragon Holdings

ownership-breakdown
SEHK:1184 Ownership Breakdown May 31st 2021

What Does The Lack Of Institutional Ownership Tell Us About S.A.S. Dragon 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 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 S.A.S. Dragon Holdings, for yourself, below.

earnings-and-revenue-growth
SEHK:1184 Earnings and Revenue Growth May 31st 2021

S.A.S. Dragon Holdings is not owned by hedge funds. The company's CEO Yuk Lun Yim is the largest shareholder with 54% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. Hon Hai Precision Industry Co., Ltd. is the second largest shareholder owning 20% of common stock, and Dimensional Fund Advisors L.P. holds about 0.8% of the company stock.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of S.A.S. Dragon Holdings

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.

It seems that insiders own more than half the S.A.S. Dragon Holdings Limited stock. This gives them a lot of power. That means they own HK$1.1b worth of shares in the HK$2.0b 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

The general public, with a 25% stake in the company, will not easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

We can see that public companies hold 20% of the S.A.S. Dragon Holdings shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for S.A.S. Dragon Holdings (1 is significant) that you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free 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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