SITC International Holdings Company Limited's (HKG:1308) market cap surged HK$1.0b last week, private companies who have a lot riding on the company were rewarded

Key Insights

• Significant control over SITC International Holdings by private companies implies that the general public has more power to influence management and governance-related decisions
• 53% of the business is held by the top 3 shareholders
• Insider ownership in SITC International Holdings is 11%

To get a sense of who is truly in control of SITC International Holdings Company Limited (HKG:1308), it is important to understand the ownership structure of the business. With 41% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private companies benefitted the most after the company's market cap rose by HK$1.0b last week.

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

View our latest analysis for SITC International Holdings

What Does The Institutional Ownership Tell Us About SITC International Holdings?

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.

SITC International Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 SITC International Holdings, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in SITC International Holdings. Our data shows that Better Master Investments Limited is the largest shareholder with 41% of shares outstanding. With 9.0% and 3.4% of the shares outstanding respectively, Xianxiang Yang and BlackRock, Inc. are the second and third largest shareholders. Xianxiang Yang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 3 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of SITC International Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of SITC International Holdings Company Limited. It is very interesting to see that insiders have a meaningful HK$3.9b stake in this HK$34b business. 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, who are usually individual investors, hold a 30% stake in SITC International 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

It seems that Private Companies own 41%, of the SITC International Holdings stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand SITC International Holdings better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for SITC International Holdings (of which 2 shouldn't be ignored!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.