What Is The Ownership Structure Like For Kelington Group Berhad (KLSE:KGB)?

By
Simply Wall St
Published
June 03, 2021
KLSE:KGB
Source: Shutterstock

Every investor in Kelington Group Berhad (KLSE:KGB) should be aware of the most powerful shareholder groups. Large companies usually have institutions as shareholders, and we usually see insiders owning shares in smaller companies. Companies that used to be publicly owned tend to have lower insider ownership.

Kelington Group Berhad is not a large company by global standards. It has a market capitalization of RM669m, which means it wouldn't have the attention of many institutional investors. In the chart below, we can see that institutions are noticeable on the share registry. We can zoom in on the different ownership groups, to learn more about Kelington Group Berhad.

Check out our latest analysis for Kelington Group Berhad

ownership-breakdown
KLSE:KGB Ownership Breakdown June 4th 2021

What Does The Institutional Ownership Tell Us About Kelington Group 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.

We can see that Kelington Group Berhad 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. 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 Kelington Group Berhad's earnings history below. Of course, the future is what really matters.

earnings-and-revenue-growth
KLSE:KGB Earnings and Revenue Growth June 4th 2021

We note that hedge funds don't have a meaningful investment in Kelington Group Berhad. Our data shows that Palace Star Sdn Bhd is the largest shareholder with 21% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.2% and 6.0%, of the shares outstanding, respectively. Additionally, the company's CEO Hung Keng Gan directly holds 0.7% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 7 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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

Insider Ownership Of Kelington Group 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. 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 some shares in Kelington Group Berhad. It has a market capitalization of just RM669m, and insiders have RM21m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board, though I generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public holds a 28% stake in Kelington Group 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 27%, 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 instance, we've identified 2 warning signs for Kelington Group Berhad (1 shouldn't be ignored) that you should be aware of.

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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