Could The Confidence Intelligence Holdings Limited (HKG:1967) Ownership Structure Tell Us Something Useful?

If you want to know who really controls Confidence Intelligence Holdings Limited (HKG:1967), 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.

Confidence Intelligence Holdings is not a large company by global standards. It has a market capitalization of HK$3.1b, which means it wouldn't have the attention of many institutional investors. Taking a look at our data on the ownership groups (below), it seems that institutions don't own shares in the company. Let's delve deeper into each type of owner, to discover more about Confidence Intelligence Holdings.

View our latest analysis for Confidence Intelligence Holdings

What Does The Lack Of Institutional Ownership Tell Us About Confidence Intelligence Holdings?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

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. Alternatively, there might be something about the company that has kept institutional investors away. Confidence Intelligence Holdings' earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

Confidence Intelligence Holdings is not owned by hedge funds. With a 40% stake, CEO Hao Li is the largest shareholder. Shuntang Yuan is the second largest shareholder owning 19% of common stock, and Bizhong Zhang holds about 11% of the company stock. Interestingly, the third-largest shareholder, Bizhong Zhang is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. 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 Confidence Intelligence Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

Our information suggests that insiders own more than half of Confidence Intelligence Holdings Limited. This gives them effective control of the company. Given it has a market cap of HK$3.1b, that means they have HK$2.1b 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

With a 20% ownership, the general public have some degree of sway over Confidence Intelligence Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

It seems that Private Companies own 9.7%, of the Confidence Intelligence Holdings stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 - Confidence Intelligence Holdings has 3 warning signs (and 1 which is significant) we think you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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. 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.
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