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Could The Kader Holdings Company Limited (HKG:180) Ownership Structure Tell Us Something Useful?

Simply Wall St

If you want to know who really controls Kader Holdings Company Limited (HKG:180), then you'll have to look at the makeup of its share registry. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time. I quite like to see at least a little bit of insider ownership. As Charlie Munger said 'Show me the incentive and I will show you the outcome.

Kader Holdings is not a large company by global standards. It has a market capitalization of HK$770m, which means it wouldn't have the attention of many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased much of the company. Let's delve deeper into each type of owner, to discover more about 180.

View our latest analysis for Kader Holdings

SEHK:180 Ownership Summary, September 30th 2019

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

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Kader Holdings's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

SEHK:180 Income Statement, September 30th 2019

We note that hedge funds don't have a meaningful investment in Kader Holdings. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Kader Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Kader Holdings Company Limited. It has a market capitalization of just HK$770m, and insiders have HK$304m worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

With a 34% ownership, the general public have some degree of sway over 180. 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.

Private Company Ownership

It seems that Private Companies own 26%, of the 180 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:

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.

I like to dive deeper into how a company has performed in the past. You can find historic revenue and earnings in this detailed graph.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.

We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.

If you spot an error that warrants correction, please contact the editor at editorial-team@simplywallst.com. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.