Individual investors are Hanwha Engine Co., Ltd.'s (KRX:082740) biggest owners and were rewarded after market cap rose by ₩159b last week

Key Insights

• Significant control over Hanwha Engine by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 3 investors have a majority stake in the company with 55% ownership
• Institutions own 19% of Hanwha Engine

To get a sense of who is truly in control of Hanwha Engine Co., Ltd. (KRX:082740), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, individual investors collectively scored the highest last week as the company hit ₩2.0t market cap following a 8.5% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Hanwha Engine.

See our latest analysis for Hanwha Engine

What Does The Institutional Ownership Tell Us About Hanwha Engine?

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.

Hanwha Engine already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Hanwha Engine's historic earnings and revenue below, but keep in mind there's always more to the story.

Hanwha Engine is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Hanwha Impact Global Co., Ltd with 33% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 9.9% by the third-largest shareholder.

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.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Hanwha Engine

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 Hanwha Engine Co., Ltd.. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around ₩68m worth of shares (at current prices). 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 38% stake in the company, and hence can't easily be ignored. 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

We can see that Private Companies own 33%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

Public companies currently own 9.9% of Hanwha Engine stock. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hanwha Engine better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hanwha Engine 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.

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.