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Can We See Significant Insider Ownership On The China Kepei Education Group Limited (HKG:1890) Share Register?

Simply Wall St

The big shareholder groups in China Kepei Education Group Limited (HKG:1890) have power over the company. Insiders often own a large chunk of younger, smaller, companies while huge companies tend to have institutions as shareholders. Warren Buffett said that he likes 'a business with enduring competitive advantages that is run by able and owner-oriented people'. So it's nice to see some insider ownership, because it may suggest that management is owner-oriented.

China Kepei Education Group has a market capitalization of HK$7.8b, so we would expect some institutional investors to have noticed the stock. In the chart below below, we can see that institutions are not really that prevalent on the share registry. We can zoom in on the different ownership groups, to learn more about 1890.

See our latest analysis for China Kepei Education Group

SEHK:1890 Ownership Summary, November 8th 2019

What Does The Lack Of Institutional Ownership Tell Us About China Kepei Education Group?

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 are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to fund under management, so the institition does not bother to look closely at 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. China Kepei Education Group might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:1890 Income Statement, November 8th 2019

We note that hedge funds don't have a meaningful investment in China Kepei Education Group. 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 China Kepei Education Group

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.

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 China Kepei Education Group Limited. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$5.3b stake in this HK$7.8b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 24% ownership, the general public have some degree of sway over 1890. 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.

Private Company Ownership

Our data indicates that Private Companies hold 7.3%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important.

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.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.