Top Key Executive Zhi Lie Chen, EVOC Intelligent Technology Company Limited's (HKG:2308) largest shareholder sees value of holdings go down 12% after recent drop

By
Simply Wall St
Published
March 15, 2022
SEHK:2308
Source: Shutterstock

A look at the shareholders of EVOC Intelligent Technology Company Limited (HKG:2308) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 75% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, insiders endured the biggest losses as the stock fell by 12%.

Let's take a closer look to see what the different types of shareholders can tell us about EVOC Intelligent Technology.

View our latest analysis for EVOC Intelligent Technology

ownership-breakdown
SEHK:2308 Ownership Breakdown March 15th 2022

What Does The Lack Of Institutional Ownership Tell Us About EVOC Intelligent Technology?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

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. 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 EVOC Intelligent Technology, for yourself, below.

earnings-and-revenue-growth
SEHK:2308 Earnings and Revenue Growth March 15th 2022

EVOC Intelligent Technology is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In EVOC Intelligent Technology's case, its Top Key Executive, Zhi Lie Chen, is the largest shareholder, holding 75% of shares outstanding.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of EVOC Intelligent Technology

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 information suggests that insiders own more than half of EVOC Intelligent Technology Company Limited. This gives them effective control of the company. Given it has a market cap of HK$1.2b, that means they have HK$916m 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-- including retail investors -- own 25% stake in the company, and hence can't 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.

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 EVOC Intelligent Technology that you should be aware of.

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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