Key Insights
- West China Cement's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- 43% of the business is held by the top 25 shareholders
- 14% of West China Cement is held by Institutions
A look at the shareholders of West China Cement Limited (HKG:2233) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 57% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
As a result, retail investors as a group endured the highest losses last week after market cap fell by HK$546m.
Let's take a closer look to see what the different types of shareholders can tell us about West China Cement.
Check out our latest analysis for West China Cement
What Does The Institutional Ownership Tell Us About West China Cement?
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 companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in West China Cement. 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. 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 West China Cement's earnings history below. Of course, the future is what really matters.
We note that hedge funds don't have a meaningful investment in West China Cement. Looking at our data, we can see that the largest shareholder is Anhui Conch Cement Company Limited with 29% of shares outstanding. With 5.0% and 2.8% of the shares outstanding respectively, AllianceBernstein L.P. and Skagen AS are the second and third largest shareholders.
A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.
Insider Ownership Of West China Cement
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 less than 1% of West China Cement Limited. It's a big company, so even a small proportional interest can create alignment between the board and shareholders. In this case insiders own HK$9.1m worth of shares. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.
General Public Ownership
The general public, mostly comprising of individual investors, collectively holds 57% of West China Cement shares. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.
Public Company Ownership
We can see that public companies hold 29% of the West China Cement shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 3 warning signs for West China Cement you should be aware of.
If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.
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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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an 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 account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.