Key Insights
- Insiders appear to have a vested interest in Baoye Group's growth, as seen by their sizeable ownership
- The top 4 shareholders own 50% of the company
- Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
To get a sense of who is truly in control of Baoye Group Company Limited (HKG:2355), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 56% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
As a result, insiders scored the highest last week as the company hit HK$2.6b market cap following a 11% gain in the stock.
In the chart below, we zoom in on the different ownership groups of Baoye Group.
See our latest analysis for Baoye Group
What Does The Lack Of Institutional Ownership Tell Us About Baoye Group?
Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.
There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 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 Baoye Group, for yourself, below.
Baoye Group is not owned by hedge funds. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Baoye Group's case, its Top Key Executive, Baogen Pang, is the largest shareholder, holding 37% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.6% and 3.6% of the stock. Interestingly, the third-largest shareholder, Feng Xia is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.
To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.
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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.
Insider Ownership Of Baoye Group
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 information suggests that insiders own more than half of Baoye Group Company Limited. This gives them effective control of the company. Given it has a market cap of HK$2.6b, that means they have HK$1.5b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public-- including retail investors -- own 43% stake in the company, and hence can't easily be ignored. 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.
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. Case in point: We've spotted 3 warning signs for Baoye Group you should be aware of, and 1 of them shouldn't be ignored.
If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.
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.