To get an idea of ​​who really controls China International Capital Corporation Limited (HKG:3908), it is important to understand the ownership structure of the company. The group with the largest number of shares in the company, around 40% to be precise, is that of sovereign wealth funds. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

And after last week’s 3.2% share price decline, sovereign wealth funds suffered the most losses.

Let’s dive deeper into each type of China International Capital owner, starting with the table below.

See our latest analysis for China International Capital

What does institutional ownership tell us about China International Capital?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors hold a sizeable share of China International Capital. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. It is therefore worth checking the past earnings trajectory of China International Capital (below). Of course, keep in mind that there are other factors to consider as well.

We note that hedge funds have no significant investment in China International Capital. Our data shows that Central Huijin Investment Ltd. is the main shareholder with 40% of the outstanding shares. Meanwhile, the second and third largest shareholders hold 8.3% and 4.5% of the outstanding shares respectively.

A more detailed study of the shareholder register showed us that 3 of the main shareholders hold a considerable stake in the company, via their 53% stake.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.

China International Capital Insider Ownership

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.

Our data suggests that insiders hold less than 1% of China International Capital Corporation Limited in their own name. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. Being so large, we wouldn’t expect insiders to own a large portion of the shares. Collectively, they own HK$303 million worth of shares. Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.

General public property

The general public, including retail investors, owns 26% of the company’s capital and therefore cannot be easily ignored. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.

Private Company Ownership

Our data indicates that private companies own 13% of the company’s shares. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Ownership of a public company

We can see that state-owned enterprises hold 9.0% of China International Capital’s outstanding shares. It may be a strategic interest and both companies may have related business interests. They may have separated. This exploitation probably deserves further investigation.

Next steps:

I find it very interesting to see who exactly owns a business. But to really get insight, we also need to consider other information.

I always like to check a revenue growth history. You can also, by accessing this free revenue and profit history chart in this detailed graph.

If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

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This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.