Nasdaq
华尔街日报SITC International Holdings Company Limited's (HKG:1308) market cap dropped HK$4.5b last week; Private companies bore the brunt
Key Insights
- Significant control over SITC International Holdings by private companies implies that the general public has more power to influence management and governance-related decisions
- 53% of the business is held by the top 3 shareholders
- Insiders own 11% of SITC International Holdings
If you want to know who really controls SITC International Holdings Company Limited (HKG:1308), then you'll have to look at the makeup of its share registry. We can see that private companies own the lion's share in the company with 41% ownership. Put another way, the group faces the maximum upside potential (or downside risk).
And following last week's 5.9% decline in share price, private companies suffered the most losses.
Let's delve deeper into each type of owner of SITC International Holdings, beginning with the chart below.
Check out our latest analysis for SITC International Holdings
What Does The Institutional Ownership Tell Us About SITC International Holdings?
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.
SITC International Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 SITC International Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.
We note that hedge funds don't have a meaningful investment in SITC International Holdings. The company's largest shareholder is Better Master Investments Limited, with ownership of 41%. Xianxiang Yang is the second largest shareholder owning 9.0% of common stock, and BlackRock, Inc. holds about 3.3% of the company stock. Xianxiang Yang, who is the second-largest shareholder, also happens to hold the title of Top Key Executive.
After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.
Insider Ownership Of SITC International Holdings
The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.
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 a reasonable proportion of SITC International Holdings Company Limited. Insiders own HK$7.8b worth of shares in the HK$72b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.
General Public Ownership
With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over SITC International Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 41%, of the company's shares. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.
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. Be aware that SITC International Holdings is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...
If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.
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.
Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.
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.