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The big shareholder groups in Shanshan Brand Management Co., Ltd. (

HKG:1749

) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. I quite like to see at least a little bit of insider ownership. As Charlie Munger said ‘Show me the incentive and I will show you the outcome.’

Shanshan Brand Management is not a large company by global standards. It has a market capitalization of HK$184m, which means it wouldn’t have the attention of many institutional investors. Taking a look at the our data on the ownership groups (below), it’s seems that institutions are not on the share registry. Let’s delve deeper into each type of owner, to discover more about 1749.

See our latest analysis for Shanshan Brand Management

SEHK:1749 Ownership Summary February 1st 19

What Does The Lack Of Institutional Ownership Tell Us About Shanshan Brand Management?

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 many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don’t own the stock because they aren’t convinced it will perform well. Shanshan Brand Management might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

SEHK:1749 Income Statement Export February 1st 19

We note that hedge funds don’t have a meaningful investment in Shanshan Brand Management. 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 Shanshan Brand Management

The definition of company insiders can be subjective, and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Story continues

We can see that insiders own shares in Shanshan Brand Management Co., Ltd.. As individuals, the insiders collectively own HK$14m worth of the HK$184m company. It is good to see some investment by insiders, but I usually like to see higher insider holdings. It might be worth checking

if those insiders have been buying.

General Public Ownership

The general public holds a 25% stake in 1749. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Public Company Ownership

We can see that public companies hold 67%, of the 1749 shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It’s always worth thinking about the different groups who own shares in a company. But to understand Shanshan Brand Management better, we need to consider many other factors.

I always like to check for a

history of revenue growth

. You can too, by accessing this free chart of

historic revenue and earnings in this

detailed graph

.

Of course

this may not be the best stock to buy

. Therefore, you may wish to see our

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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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at

[email protected]

.

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