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If you want to know who really controls Xiwang Special Steel Company Limited (HKG:1266), then you'll have to look at the makeup of its share registry. 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.
Xiwang Special Steel is a smaller company with a market capitalization of HK$2.4b, so it may still be flying under the radar of many institutional investors. In the chart below below, we can see that institutional investors have bought into the company. Let's take a closer look to see what the different types of shareholder can tell us about 1266.
See our latest analysis for Xiwang Special Steel
What Does The Institutional Ownership Tell Us About Xiwang Special Steel?
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 Xiwang Special Steel does have institutional investors; and they hold 5.9% of the stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone, since institutions make bad investments sometimes, just like everyone does. 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 Xiwang Special Steel's historic earnings and revenue, below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Xiwang Special Steel. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.
Insider Ownership Of Xiwang Special Steel
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.
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 data suggests that insiders own under 1% of Xiwang Special Steel Company Limited in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It seems the board members have no more than HK$11m worth of shares in the HK$2.4b company. Many investors in smaller companies prefer to see the board more heavily invested. You can click here to see if those insiders have been buying or selling.