Significant insider control over Hywin Holdings implies vested interests in company growth
The largest shareholder of the company is Hongwei Han with a 71% stake
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock
If you want to know who really controls Hywin Holdings Ltd. (NASDAQ:HYW), then you'll have to look at the makeup of its share registry. With 85% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
So, insiders of Hywin Holdings have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.
In the chart below, we zoom in on the different ownership groups of Hywin Holdings.
What Does The Lack Of Institutional Ownership Tell Us About Hywin 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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Hywin Holdings, for yourself, below.
Hedge funds don't have many shares in Hywin Holdings. Our data suggests that Hongwei Han, who is also the company's Top Key Executive, holds the most number of shares at 71%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Dian Wang is the second largest shareholder owning 13% of common stock, and IvyRock Asset Management (HK) Limited holds about 0.7% of the company stock. Interestingly, the second-largest shareholder, Dian Wang is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.
While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.
Insider Ownership Of Hywin 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 the majority of Hywin Holdings Ltd.. This means they can collectively make decisions for the company. That means they own US$166m worth of shares in the US$196m company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.
General Public Ownership
With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hywin Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.
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 risks, for instance. Every company has them, and we've spotted 1 warning sign for Hywin Holdings you should know about.
Ultimately the future is most important. You can access this free report on analyst forecasts for the company.
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.