To get an idea of who really controls China Carbon Neutral Development Group Limited (HKG:1372), it is important to understand the ownership structure of the company. We can see that individual insiders hold the lion’s share of the company with 60% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).
As the market capitalization fell to HK$932 million last week, insiders reportedly suffered the highest losses than any other group of shareholders in the company.
In the table below, we zoom in on the different ownership groups of the China Carbon Neutral Development Group.
See our latest analysis for China Carbon Neutral Development Group
What does the lack of institutional ownership tell us about the China Carbon Neutral Development Group?
We don’t tend to see institutional investors owning stocks of very risky, lightly traded or very small companies. Although we sometimes see large companies without institutions listed on the register, this is not particularly common.
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. On the other hand, it’s always possible for professional investors to avoid a company because they think it’s not the best place for their money. Institutional investors may not find the company’s historic growth impressive, or there may be other factors at play. You can see China Carbon Neutral Development Group’s past revenue performance for yourself below. below.
We note that hedge funds have no significant investment in China Carbon Neutral Development Group. Looking at our data, we can see that the largest shareholder is Tao Sha with 29% of the shares outstanding. With respectively 17% and 7.8% of the outstanding shares, Jianhui Jiang and Junsheng Cao are the second and third shareholders.
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 54% 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. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.
Insider owned by China Carbon Neutral Development Group
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.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our information suggests that insiders own more than half of China Carbon Neutral Development Group Limited. This gives them effective control of the business. So they have a HK$560 million stake in this HK$932 million business. Most would be delighted to see the board investing alongside them. You might want to find out (free) whether they bought or sold.
General public property
The general public, who are usually individual investors, hold a 27% stake in China Carbon Neutral Development Group. This size of ownership, although considerable, may not be sufficient to change company policy if the decision is not in line with other major shareholders.
Private Company Ownership
We can see that private companies hold 13% of the issued shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
While it is worth considering the different groups that own a business, there are other, even more important factors. Take for example the ubiquitous specter of investment risk. We have identified 4 warning signs with China Carbon Neutral Development Group (at least 1 that cannot be ignored), and understanding them should be part of your investment process.
Sure this may not be the best stock to buy. So take a look at this free 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 in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.
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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.