How Many GCL New Energy Holdings Limited (HKG:451) Shares Do Institutions Own?

By
Simply Wall St
Published
January 06, 2022
SEHK:451
Source: Shutterstock

The big shareholder groups in GCL New Energy Holdings Limited (HKG:451) have power over the company. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Companies that have been privatized tend to have low insider ownership.

GCL New Energy Holdings is a smaller company with a market capitalization of HK$4.7b, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutions are noticeable on the share registry. Let's take a closer look to see what the different types of shareholders can tell us about GCL New Energy Holdings.

View our latest analysis for GCL New Energy Holdings

ownership-breakdown
SEHK:451 Ownership Breakdown January 6th 2022

What Does The Institutional Ownership Tell Us About GCL New Energy Holdings?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that GCL New Energy Holdings does have institutional investors; and they hold a good portion of the company's stock. 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 GCL New Energy Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
SEHK:451 Earnings and Revenue Growth January 6th 2022

GCL New Energy Holdings is not owned by hedge funds. The company's largest shareholder is GCL-Poly Energy Holdings Limited, with ownership of 53%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 9.0% and 4.9% of the shares outstanding respectively, GCL System Integration Technology Co., Ltd. and China Orient Asset Management Corporation, Asset Management Arm 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 GCL New Energy Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 data cannot confirm that board members are holding shares personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to take a look at this free summary of insider buying and selling.

General Public Ownership

The general public-- including retail investors -- own 27% 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 62% of the GCL New Energy Holdings shares on issue. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand GCL New Energy Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for GCL New Energy Holdings you should be aware of, and 1 of them makes us a bit uncomfortable.

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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