Do Directors Own Zhejiang United Investment Holdings Group Limited (HKG:8366) Shares?

Simply Wall St

Sat, Jun 22, 2019, 6:25 PM

If you want to know who really controls Zhejiang United Investment Holdings Group Limited (HKG:8366), then you'll have to look at the makeup of its share registry. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

Zhejiang United Investment Holdings Group is a smaller company with a market capitalization of HK$867m, so it may still be flying under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that institutional investors have not yet purchased shares. Let's take a closer look to see what the different types of shareholder can tell us about 8366.

Check out our latest analysis for Zhejiang United Investment Holdings Group

SEHK:8366 Ownership Summary, June 23rd 2019

What Does The Lack Of Institutional Ownership Tell Us About Zhejiang United Investment Holdings Group?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Zhejiang United Investment Holdings Group, for yourself, below.

SEHK:8366 Income Statement, June 23rd 2019

Hedge funds don't have many shares in Zhejiang United Investment Holdings Group. 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 Zhejiang United Investment Holdings Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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.

It seems that insiders own more than half the Zhejiang United Investment Holdings Group Limited stock. This gives them a lot of power. So they have a HK$594m stake in this HK$867m business. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 32% ownership, the general public have some degree of sway over 8366. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

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.

Many find it useful to take an in depth look at how a company has performed in the past. You can access this detailed graph of past earnings, revenue and cash flow .

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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.

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