Public companies in Towngas Smart Energy Company Limited (HKG:1083) are its biggest bettors, and their bets paid off as stock gained 4.0% last week

Key Insights

• Towngas Smart Energy's significant public companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 67% of the company is held by a single shareholder (The Hong Kong and China Gas Company Limited)
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Towngas Smart Energy Company Limited (HKG:1083), 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 public companies with 67% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, public companies collectively scored the highest last week as the company hit HK$11b market cap following a 4.0% gain in the stock.

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

View our latest analysis for Towngas Smart Energy

What Does The Institutional Ownership Tell Us About Towngas Smart Energy?

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.

As you can see, institutional investors have a fair amount of stake in Towngas Smart Energy. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Towngas Smart Energy's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Towngas Smart Energy. Our data shows that The Hong Kong and China Gas Company Limited is the largest shareholder with 67% of shares outstanding. This implies that they have majority interest control of the future of the company. With 3.6% and 1.4% of the shares outstanding respectively, Affinity Equity Partners Limited and The Vanguard Group, Inc. 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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Towngas Smart Energy

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.

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 less than 1% of Towngas Smart Energy Company Limited. Keep in mind that it's a big company, and the insiders own HK$53m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 24% stake in the company, and hence can't easily be ignored. 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.

Public Company Ownership

We can see that public companies hold 67% of the Towngas Smart Energy shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Towngas Smart Energy better, we need to consider many other factors. Take risks for example - Towngas Smart Energy has 2 warning signs (and 1 which is potentially serious) we think you should know about.

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.

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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.