To get an idea of who actually controls Lee and Man Paper Manufacturing Limited (HKG:2314), 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 73% ownership. In other words, the group is likely to gain the most (or lose the most) from its investment in the business.
Notably, insiders recently bought shares. This could indicate that they expect stock prices to rise in the near future.
Let’s take a closer look at what different types of shareholders can tell us about Lee and Man Paper Manufacturing.
Check out our latest analysis for Lee and Man Paper Manufacturing
What does institutional ownership tell us about Lee and Man papermaking?
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.
Lee and Man Paper Manufacturing already has institutions on the stock register. Indeed, they hold a respectable stake in the company. This suggests some credibility with professional investors. But we cannot rely solely on this fact since institutions sometimes make bad investments, like everyone else. It is not uncommon to see a sharp decline in the stock price if two large institutional investors attempt to sell a stock at the same time. So it’s worth checking out the past earnings trajectory of Lee and Man Paper Manufacturing (below). Of course, keep in mind that there are other factors to consider as well.
We note that hedge funds have no significant investment in Lee and Man Paper Manufacturing. The company’s CEO, Man Bun Lee, is the largest shareholder with 31% of the outstanding shares. With respectively 31% and 9.6% of the outstanding shares, Man Chun Lee and Wan Lee are the second and third shareholders. 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.
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. A number of analysts cover the stock, so you can look at growth forecasts quite easily.
Insider ownership of Lee and Man Paper Manufacturing
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
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 information suggests that insiders own more than half of Lee and Man Paper Manufacturing Limited. This gives them effective control of the business. Given that it has a market capitalization of HK$23 billion, that means insiders have a whopping HK$17 billion worth of shares in their own name. Most would be delighted to see the board investing alongside them. You might want to find out if they bought or sold.
General public property
The general public, including retail investors, owns 18% 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.
It is always useful to think about the different groups that own shares in a company. But to better understand Lee and Man Paper Manufacturing, we need to consider many other factors. Consider the risks, for example. Every business has them, and we’ve spotted 1 warning sign for Lee and Man Paper Manufacturing you should know.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
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.