Market cap

The market capitalization of OCI International Holdings Limited (HKG: 329) fell by HK$510 million last week; Individual investors have paid the price

If you want to know who actually controls OCI International Holdings Limited (HKG:329), then you will need to look at the composition of its share register. With a 32% stake, individual investors hold the most shares in the company. In other words, the group faces the maximum upside potential (or downside risk).

And last week, individual investors suffered the biggest losses, as the stock fell 9.4%.

Let’s dig deeper into each type of owner in OCI International Holdings, starting with the table below.

See our latest analysis for OCI International Holdings

SEHK: 329 Ownership Breakdown August 12, 2022

What does institutional ownership tell us about OCI International Holdings?

Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

We can see that OCI International Holdings has institutional investors; and they own a good part of the shares of the company. This may indicate that the company has some degree of credibility in the investment community. However, it is best to be wary of relying on the so-called validation that accompanies institutional investors. They are also sometimes wrong. When multiple institutions hold a stock, there is always a risk that they are in a “crowded trade”. When such a transaction goes wrong, multiple parties may compete to quickly sell shares. This risk is higher in a company with no history of growth. You can see OCI International Holdings’ historic earnings and revenue below, but keep in mind there’s always more to tell.

earnings-and-revenue-growth
SEHK: 329 Earnings and Revenue Growth Aug 12, 2022

It would seem that 29% of the shares of OCI International Holdings are controlled by hedge funds. This is interesting because hedge funds can be very active and militant. Many are looking for medium-term catalysts that will drive the stock price higher. Looking at our data, we can see that the largest shareholder is Silver Tree Hong Kong Limited with 29% of the shares outstanding. In comparison, the second and third shareholders hold around 21% and 13% of the shares. Additionally, we found that Guangze Wu, the CEO, owns 2.1% of the shares allocated in his name.

A more detailed study of the shareholder register showed us that 2 of the main shareholders hold a considerable stake in the company, via their 50% stake.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. Our information suggests there is no analyst coverage of the stock, so it is likely little known.

Insider ownership of OCI International Holdings

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. Management is ultimately responsible to the board of directors. However, it is not uncommon for managers to be members of the management board, especially if they are founders or CEOs.

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.

We may report that insiders hold shares of OCI International Holdings Limited. It has a market capitalization of just HK$4.9 billion and insiders hold HK$102 million worth of shares, in their own name. Some would say this shows the alignment of interests between shareholders and the board. But it might be worth checking to see if these insiders have sold.

General public property

The general public, who are usually individual investors, hold a 32% stake in OCI International Holdings. This size of ownership, although considerable, may not be enough to change company policy if the decision is not in line with other major shareholders.

Private Equity Ownership

With a 21% stake, private equity firms could influence the board of directors of OCI International Holdings. This might appeal to some, because private equity is sometimes an activist who holds management accountable. But other times, the private equity sells off, after taking the company public.

Next steps:

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

I like to dive deeper on the performance of a company in the past. You can access this interactive chart past earnings, income and cash flow, for free.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

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 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.