Each investor in China Chunlai Education Group Co., Ltd. (HKG: 1969) must know the most powerful groups of shareholders. Insiders often own a large portion of younger and smaller firms, while larger firms tend to have institutions as shareholders. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
China Chunlai Education Group is a small company with a market cap of HK $ 2.4 billion, so it may still go under the radar of many institutional investors. Our analysis of company ownership, below, shows that institutional investors have yet to buy much of the company. Let’s take a closer look at what different types of shareholders can tell us about China Chunlai Education Group.
Check out our latest analysis for China Chunlai Education Group
What does institutional ownership tell us about the China Chunlai education group?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. . We would expect most businesses to have some institutions listed, especially if they are growing.
Since institutions only own a small portion of the China Chunlai Education Group, many may not have spent much time reviewing the stock. But it is clear that some have; and they liked it enough to buy it. So if the business itself can improve over time, we may well see more institutional buyers in the future. When several institutional investors want to buy stocks, we often see a rise in the price of the stocks. The past trajectory of income (shown below) may be an indication of future growth, but there is no guarantee.
Hedge funds don’t have a lot of shares in China Chunlai Education Group. From our data, we deduce that the largest shareholder is Junyu Hou (who also holds the title of Senior Key Executive) with 75% of the shares outstanding. It’s generally considered a good sign when insiders own a significant number of company shares, and in this case, we’re happy to see a company insider playing the role of a key stakeholder. In comparison, the second and third shareholders hold around 5.5% and 2.8% of the capital.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. As far as we can tell, the company is not covered by analysts, so it probably goes unnoticed.
Insider Ownership of China Chunlai Education Group
The definition of business insiders can be subjective and vary from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.
Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.
Our information suggests that insiders own more than half of China Chunlai Education Group Co., Ltd. This gives them effective control of the company. Given that it has a market cap of HK $ 2.4 billion, that means that they have HK $ 1.8 billion of shares. Most would be happy to see the board invest alongside them. You may wish to find out (free) whether they bought or sold.
General public property
The general public, who are usually individual investors, own a 17% stake in China Chunlai Education Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not aligned with other large shareholders.
Owned by a private company
We can see that the private companies own 5.5% of the issued shares. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.
I find it very interesting to see who exactly owns a company. But to really gain insight, we have to take other information into account as well. For example, we have identified 3 warning signs for China Chunlai Education Group that you need to be aware of.
Sure, you might find a fantastic investment looking elsewhere. So take a look at this free list of interesting companies.
NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only 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 into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.