The market capitalization of China Vered Financial Holding Corporation Limited (HKG:245) fell by HK$243 million last week; Individual investors have paid the price

If you want to know who really controls China Vered Financial Holding Corporation Limited (HKG:245), then you’ll have to look at the composition of its share register. And the group that holds the biggest slice of the pie are individual investors with 40% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).

And last week, individual investors suffered the biggest losses as the stock fell 10%.

Let’s dive deeper into each type of owner in China Vered Financial Holding, starting with the table below.

See our latest analysis for China Vered Financial Holding

SEHK:245 Ownership Distribution February 25, 2022

What does the lack of institutional ownership tell us about China Vered Financial Holding?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their liking. But it’s unusual to see large companies without institutional investors.

There are several explanations why institutions do not own stocks. The most common is that the business is too small relative to the funds under management, so the institution doesn’t bother to look closely at the business. Alternatively, there could be something about the company that has kept institutional investors away. China Vered Financial Holding’s earnings and revenue (below) may not be compelling to institutional investors – or they may simply not have examined the company closely.

SEHK: 245 Profit and Revenue Growth February 25, 2022

We note that hedge funds have no significant investment in China Vered Financial Holding. Vered Holdings Group Ltd is currently the company’s largest shareholder with 29% of the outstanding shares. Meanwhile, the second and third largest shareholders hold 13% and 10% of the outstanding shares respectively.

A more detailed study of the shareholder register showed us that 3 of the main shareholders hold a considerable stake in the company, via their 52% stake.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. We don’t see any analyst coverage of the stock at this time, so the company is unlikely to be widely held.

Insider ownership of China Vered Financial Holding

The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders hold a significant stake in China Vered Financial Holding Corporation Limited. Its market capitalization is only HK$2.1 billion and insiders hold HK$522 million worth of shares in their own name. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

The general public, usually individual investors, owns 40% of the capital of China Vered Financial Holding. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private equity ownership

The private equity firms hold a 6.0% stake in China Vered Financial Holding. This suggests that they can influence key policy decisions. Some investors might be encouraged by this, as private equity is sometimes able to encourage strategies that help the market see the value of the company. Alternatively, these holders could exit the investment after making it public.

Private Company Ownership

It appears that private companies own 29% of the shares of China Vered Financial Holding. Private companies can be related parties. Sometimes insiders have an interest in a public company through a stake in a private company, rather than in their own capacity as individuals. Although it is difficult to draw general conclusions, it should be noted that this is an area for further research.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand China Vered Financial Holding, we need to consider many other factors. Example: we have identified 2 warning signs for China Vered Financial Holding you should be aware.

If you’d rather check out another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

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