Every investor in Natural Beauty Bio-Technology Limited (HKG:157) should be aware of the most powerful shareholder groups. With 38% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).
While private companies were the group that reaped the most benefits after last week’s 11% price gain, insiders also received a 37% cut.
Let’s take a closer look to see what the different types of shareholders can tell us about Natural Beauty Bio-Technology.
Check out our latest analysis for Natural Beauty Bio-Technology
SEHK:157 Ownership Breakdown December 6th 2021
What Does The Lack Of Institutional Ownership Tell Us About Natural Beauty Bio-Technology?
Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.
There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it’s always possible that professional investors are avoiding a company because they don’t think it’s the best place for their money. Natural Beauty Bio-Technology might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.
SEHK:157 Earnings and Revenue Growth December 6th 2021
Natural Beauty Bio-Technology is not owned by hedge funds. Our data shows that Far Eastern Silo & Shipping (Panama) S.A. is the largest shareholder with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 23% and 15%, of the shares outstanding, respectively. Yen-Yu Tsai, who is the third-largest shareholder, also happens to hold the title of Chairman Emeritus.
A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 53% stake.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. We’re not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.
Insider Ownership Of Natural Beauty Bio-Technology
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.
It seems insiders own a significant proportion of Natural Beauty Bio-Technology Limited. Insiders have a HK$440m stake in this HK$1.2b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.
General Public Ownership
The general public, who are usually individual investors, hold a 25% stake in Natural Beauty Bio-Technology. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 38%, of the company’s shares. It’s hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.
Next Steps:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider for instance, the ever-present spectre of investment risk. We’ve identified 1 warning sign with Natural Beauty Bio-Technology , and understanding them should be part of your investment process.
Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.
NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.