Following recent decline, Kejuruteraan Asastera Berhad's (KLSE:KAB) top shareholder CEO Keng Onn Lai sees holdings value drop by 12%

By
Simply Wall St
Published
November 29, 2021
KLSE:KAB
Source: Shutterstock

If you want to know who really controls Kejuruteraan Asastera Berhad (KLSE:KAB), 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 individual insiders with 62% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 12% decline in share price, insiders suffered the most losses.

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

See our latest analysis for Kejuruteraanstera Berhad

ownership-breakdown
KLSE:KAB Ownership Breakdown November 30th 2021

What Does The Institutional Ownership Tell Us About Kejuruteraanstera Berhad?

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.

Institutions have a very small stake in Kejuruteraanstera Berhad. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

earnings-and-revenue-growth
KLSE:KAB Earnings and Revenue Growth November 30th 2021

We note that hedge funds don't have a meaningful investment in Kejuruteraanstera Berhad. With a 31% stake, CEO Keng Onn Lai is the largest shareholder. GAT Success (M) Sdn Bhd is the second largest shareholder owning 10% of common stock, and Poh Chow holds about 6.5% of the company stock.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Kejuruteraanstera Berhad

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. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders own more than half of Kejuruteraan Asastera Berhad. This gives them effective control of the company. So they have a RM328m stake in this RM533m business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Kejuruteraanstera Berhad. 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 20%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 5 warning signs for Kejuruteraanstera Berhad (3 don't sit too well with us!) that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.

Discounted cash flow calculation for every stock

Simply Wall St does a detailed discounted cash flow calculation every 6 hours for every stock on the market, so if you want to find the intrinsic value of any company just search here. It’s FREE.

Make Confident Investment Decisions

Simply Wall St's Editorial Team provides unbiased, factual reporting on global stocks using in-depth fundamental analysis.
Find out more about our editorial guidelines and team.