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Despite recent sales, Sky Light Holdings Limited (HKG:3882) insiders own 73% shares but recent downturn may have set them back


To get a sense of who is truly in control of Sky Light Holdings Limited (HKG:3882), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion’s share in the company with 73% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Despite recent sales, insiders own the most shares in the company. As a result, they were also the group to endure the biggest losses as the stock fell by 11%.

Let’s take a closer look to see what the different types of shareholders can tell us about Sky Light Holdings.

Check out the opportunities and risks within the HK Consumer Durables industry.

SEHK:3882 Ownership Breakdown November 24th 2022

What Does The Lack Of Institutional Ownership Tell Us About Sky Light Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it’s unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. Alternatively, there might be something about the company that has kept institutional investors away. Sky Light Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

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SEHK:3882 Earnings and Revenue Growth November 24th 2022

We note that hedge funds don’t have a meaningful investment in Sky Light Holdings. With a 69% stake, CEO Wing Fong Tang is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. Meanwhile, the second and third largest shareholders, hold 4.1% and 0.03%, of the shares outstanding, respectively.

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. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Sky Light Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 most recent data indicates that insiders own the majority of Sky Light Holdings Limited. This means they can collectively make decisions for the company. So they have a HK$880m stake in this HK$1.2b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 27% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sky Light Holdings. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example – Sky Light Holdings has 3 warning signs (and 1 which is a bit unpleasant) we think you should know about.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Sky Light Holdings is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.



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