A look at the shareholders of Chongqing Rural Commercial Bank Co., Ltd. (HKG:3618) can tell us which group is more powerful. The group with the largest number of shares in the company, around 55% to be precise, are individual investors. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Meanwhile, private companies account for 27% of the company’s shareholders.
Let’s take a closer look at what different types of shareholders can tell us about Chongqing Rural Commercial Bank.
See our latest analysis for Chongqing Rural Commercial Bank
What does institutional ownership tell us about the Chongqing Rural Commercial Bank?
Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.
Chongqing Rural Commercial Bank already has institutions listed in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be 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 Chongqing Rural Commercial Bank’s historic profits and revenues below, but keep in mind there’s always more to tell.
Chongqing Rural Commercial Bank is not a hedge fund. The company’s largest shareholder is Chongqing Yufu Capital Operation Group Co., Ltd., with an 8.7% stake. Chongqing City Construction Investment (Group) Co., Ltd. is the second largest shareholder with 7.0% of ordinary shares, and Chongqing Development Property Management Co., Ltd. owns approximately 5.2% of the company’s shares.
Looking at our ownership data, we found that 25 of the major shareholders collectively own less than 50% of the share register, implying that no single individual holds a majority stake.
While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand a stock’s expected performance. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Chongqing Rural Commercial Bank Insider Ownership
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 most recent data indicates that insiders own less than 1% of Chongqing Rural Commercial Bank Co., Ltd. But they may have an indirect interest through a corporate structure that we have not noted. This is a fairly large company, so it would be possible for board members to hold a significant stake in the company, without holding much proportional interest. In this case, they hold around HK$32 million worth of shares (at current prices). Arguably, recent purchases and sales are equally important to consider. You can click here to see if insiders have been buying or selling.
General public property
The general public, consisting mainly of individual investors, collectively owns 55% of the shares of Chongqing Rural Commercial Bank. This size of ownership gives mainstream investors a certain collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed corporate acquisitions.
Private equity ownership
With an 8.7% stake, private equity firms could influence the board of Chongqing Rural Commercial Bank. Sometimes we see private capital sticking around for the long haul, but generally they have a shorter investment horizon and, as the name suggests, don’t invest heavily in public companies. After a while, they may look to sell and redeploy capital elsewhere.
Private Company Ownership
We can see that private companies hold 27% of the issued shares. 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.
While it is worth considering the different groups that own a business, there are other, even more important factors.
I always like to check a revenue growth history. You can also, by accessing this free revenue and profit history chart in this detailed graph.
If you prefer to find out what analysts are predicting in terms of future growth, don’t miss this free analyst forecast report.
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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