If you want to know who really controls eSun Holdings Limited (HKG: 571) then you will need to look at the makeup of its share register. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. I like to see at least a little insider ownership. As Charlie Munger said, “Show me the incentive and I’ll show you the result.
With a market cap of HK $ 1.1 billion, eSun Holdings is a small cap stock, so it may not be well known to many institutional investors. Our analysis of company ownership, below, shows that institutions do not own shares in the company. Let’s dig deeper into each type of owner to learn more about eSun Holdings.
See our latest analysis for eSun Holdings
What does the lack of institutional ownership tell us about eSun Holdings?
Small companies that are not very actively traded often lack institutional investors, but it is less common to see large companies without them.
There are many reasons why a company may not have institutions listed in the share register. It can be difficult for institutions to buy large amounts of stocks if liquidity (the number of stocks traded each day) is low. If the company did not need to raise capital, institutions might not have the opportunity to create a position. It is also possible that the fund managers do not own the stock because they are not convinced that it will perform well. ESun Holdings’ earnings and revenue (below) may not be convincing to institutional investors – or they may simply not have taken a close look at the company.
Hedge funds don’t have a lot of stock in eSun Holdings. Looking at our data, we can see that the largest shareholder is Lai Sun Garment (International) Limited with 75% of the shares outstanding. This implies that they have majority control over the future of the business. The second and third shareholders are Cheuk Yi Yu and Siu Yuk Yu, with an equal number of shares in their name at 5.0%.
While it makes sense to study a company’s institutional ownership data, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. As far as I know, there is no analyst coverage of the company, so it probably goes under the radar.
Insider ownership of eSun Holdings
The definition of an insider may differ slightly from country to country, but board members still count. The management ultimately reports to the board of directors. However, it is not uncommon for managers to be board members, especially if they are founders or CEOs.
Insider ownership is positive when it indicates that executives think like the real owners of the company. However, strong insider ownership can also confer immense power on a small group within the company. This can be negative in certain circumstances.
Our most recent data indicates that insiders own a reasonable proportion of eSun Holdings Limited. Insiders have a HK $ 116 million stake in the HK $ 1.1 billion company. 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 has a 15% stake in eSun Holdings. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.
Public enterprise ownership
Public companies currently own 75% of the shares of eSun Holdings. We cannot be sure, but it is quite possible that it is a strategic issue. Companies can be similar or work together.
Next steps:
It’s always worth thinking about the different groups that own shares in a company. But to better understand eSun Holdings, there are many other factors that we need to consider. For example, we have identified 1 warning sign for eSun Holdings that you need to be aware of.
Sure this might 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 from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.
This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in any of the stocks mentioned.
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