While institutions invested in Kingboard Holdings Limited (HKG:148) benefited from last week's 4.2% gain, private companies stood to gain the most

Key Insights

• The considerable ownership by private companies in Kingboard Holdings indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 59% of the company
• Insiders have bought recently

To get a sense of who is truly in control of Kingboard Holdings Limited (HKG:148), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 43% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Private companies gained the most after market cap touched HK$21b last week, while institutions who own 31% also benefitted.

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

See our latest analysis for Kingboard Holdings

What Does The Institutional Ownership Tell Us About Kingboard Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Kingboard Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Kingboard Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Kingboard Holdings is not owned by hedge funds. Hallgain Management Limited is currently the largest shareholder, with 43% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 2.7% of the stock. Furthermore, CEO Wing Yiu Chang is the owner of 0.9% of the company's shares.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 59% stake.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Kingboard 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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Shareholders would probably be interested to learn that insiders own shares in Kingboard Holdings Limited. This is a big company, so it is good to see this level of alignment. Insiders own HK$466m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 24% stake in Kingboard Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

Our data indicates that Private Companies hold 43%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Kingboard Holdings has 2 warning signs we think you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.