Sinotrans Limited's (HKG:598) largest shareholders are private companies with 59% ownership, individual investors own 22%

Key Insights

• Sinotrans' significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The largest shareholder of the company is China Merchants Group Limited with a 59% stake
• Institutional ownership in Sinotrans is 18%

If you want to know who really controls Sinotrans Limited (HKG:598), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 59% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors, on the other hand, account for 22% of the company's stockholders.

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

View our latest analysis for Sinotrans

What Does The Institutional Ownership Tell Us About Sinotrans?

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 Sinotrans does have institutional investors; and they hold a good portion of the company's stock. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Sinotrans' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sinotrans. The company's largest shareholder is China Merchants Group Limited, with ownership of 59%. This essentially means that they have extensive influence, if not outright control, over the future of the corporation. With 4.2% and 2.4% of the shares outstanding respectively, Fidelity International Ltd and LSV Asset Management are the second and third largest shareholders.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Sinotrans

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.

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 data suggests that insiders own under 1% of Sinotrans Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own HK$124m worth of shares. The absolute value might be more important than the proportional share. It is good to see board members owning shares, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 22% stake in Sinotrans. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 59%, 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. For instance, we've identified 1 warning sign for Sinotrans that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.