A look at the shareholders of West China Cement Limited (HKG:2233) can tell us which group is most powerful. The group holding the most number of shares in the company, around 36% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).
Clearly, insiders benefitted the most after the company’s market cap rose by HK$544m last week.
Let’s take a closer look to see what the different types of shareholders can tell us about West China Cement.
Check out the opportunities and risks within the HK Basic Materials industry.
What Does The Institutional Ownership Tell Us About West China Cement?
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.
We can see that West China Cement does have institutional investors; and they hold a good portion of the company’s stock. This suggests some credibility amongst professional investors. But we can’t rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of West China Cement, (below). Of course, keep in mind that there are other factors to consider, too.
West China Cement is not owned by hedge funds. From our data, we infer that the largest shareholder is Jimin Zhang (who also holds the title of Top Key Executive) with 32% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we’re glad to see a company insider play the role of a key stakeholder. Meanwhile, the second and third largest shareholders, hold 29% and 5.0%, of the shares outstanding, respectively.
To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.
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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of West China Cement
The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.
It seems insiders own a significant proportion of West China Cement Limited. Insiders own HK$1.6b worth of shares in the HK$4.4b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 13% stake in West China Cement. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
Public companies currently own 29% of West China Cement stock. We can’t be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.
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. Consider for instance, the ever-present spectre of investment risk. We’ve identified 3 warning signs with West China Cement , and understanding them should be part of your investment process.
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.
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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.