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Institutions own 27% of Ping An Insurance (Group) Company of China, Ltd. (HKG:2318) shares but individual investors control 60% of the company


Key Insights

  • Significant control over Ping An Insurance (Group) Company of China by general public implies that this group likely has considerable sway over management and governance-related decisions
  • The top 25 shareholders own 33% of the company
  • own 27% of Ping An Insurance (Group) Company of China

If you want to know who really controls Ping An Insurance (Group) Company of China, Ltd. (HKG:2318), then you’ll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 60% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Meanwhile, institutions make up 27% of the company’s shareholders. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders.

In the chart below, we zoom in on the different ownership groups of Ping An Insurance (Group) Company of China.

Check out our latest analysis for Ping An Insurance (Group) Company of China

SEHK:2318 Ownership Breakdown January 20th 2023

What Does The Institutional Ownership Tell Us About Ping An Insurance (Group) Company of China?

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 Ping An Insurance (Group) Company of China. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Ping An Insurance (Group) Company of China’s historic earnings and revenue below, but keep in mind there’s always more to the story.

earnings-and-revenue-growth
SEHK:2318 Earnings and Revenue Growth January 20th 2023

Ping An Insurance (Group) Company of China is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Charoen Pokphand Group Co., Ltd. with 6.1% of shares outstanding. In comparison, the second and third largest shareholders hold about 5.0% and 2.8% of the stock.

Our studies suggest that the top 25 shareholders collectively control less than half of the company’s shares, meaning that the company’s shares are widely disseminated and there is no dominant shareholder.

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. 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 Ping An Insurance (Group) Company of China

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. 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 data suggests that insiders own under 1% of Ping An Insurance (Group) Company of China, Ltd. in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. Being so large, we would not expect insiders to own a large proportion of the stock. Collectively, they own HK$687m of stock. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 60% stake in Ping An Insurance (Group) Company of China, suggesting it is a fairly popular stock. 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.

Private Company Ownership

It seems that Private Companies own 12%, of the Ping An Insurance (Group) Company of China stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Ping An Insurance (Group) Company of China is showing 1 warning sign in our investment analysis , you should know about…

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.

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

Find out whether Ping An Insurance (Group) Company of China 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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