To get an idea of who actually controls Lee & Man Paper Manufacturing Limited (HKG:2314), it is important to understand the ownership structure of the company. With a 73% stake, individual insiders own the most shares in the company. In other words, the group faces the maximum upside potential (or downside risk).
Notably, insiders recently bought shares. However, with the market capitalization down HK$1.2 billion over the past week, their expectations have been far from met.
Let’s take a closer look at what different types of shareholders can tell us about Lee & Man Paper Manufacturing.
Check out our latest analysis for Lee & Man Paper Manufacturing
What does institutional ownership tell us about Lee & Man papermaking?
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 Lee & Man Paper Manufacturing has institutional investors; and they own a good part of the shares of 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. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. So it’s worth checking out Lee & Man Paper Manufacturing’s earnings history below. Of course, the future is what really matters.
We note that hedge funds have no significant investment in Lee & Man Paper Manufacturing. Looking at our data, we can see that the largest shareholder is CEO Man Bun Lee with 31% of shares outstanding. Man Chun Lee is the second largest shareholder with 31% of the common shares and Wan Lee owns about 9.7% of the company’s shares. Interestingly, the second largest shareholder, Man Chun Lee, is also Top Key Executive, again, indicating strong insider ownership among the company’s top shareholders.
To make our study more interesting, we found that the top 2 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.
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. There are plenty of analysts covering the stock, so it might be interesting to see what they are predicting as well.
Insider ownership of Lee & Man Paper Manufacturing
The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.
Insider ownership is positive when it signals that executives think like the true owners of the company. However, strong insider ownership can also give immense power to a small group within the company. This can be negative in certain circumstances.
Our most recent data indicates that insiders own the majority of Lee & Man Paper Manufacturing Limited. This means they can collectively make decisions for the business. This means insiders have a very significant HK$10 billion stake in this HK$14 billion business. Most would say this is a positive, showing strong alignment with shareholders. You can click here to see if they have sold their stake.
General public property
The general public, including retail investors, owns 19% of the company’s capital and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
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 2 warning signs with Lee & Man Paper Manufacturing, and understanding them should be part of your investment process.
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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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.