To get an idea of who really controls Launch Tech Company Limited (HKG:2488), it is important to understand the ownership structure of the company. And the group that holds the biggest slice of the pie are individual investors with 57% ownership. That is, the group will benefit the most if the stock goes up (or lose the most if there is a downturn).
As a result, individual investors collectively achieved the highest score last week, with the company reaching a market capitalization of HK$1.1 billion after a 13% gain in the stock.
Let’s dive deeper into each Launch Tech owner type, starting with the table below.
Before looking at the breakdown of owners, note that our analysis indicates that 2488 is potentially undervalued!
What does the lack of institutional ownership tell us about Launch Tech?
Small companies that are not very actively traded often lack institutional investors, but it is less common to see large companies without them.
There are several explanations why institutions do not own stocks. The most common is that the business is too small relative to the funds under management, so the institution doesn’t bother to look closely at the business. On the other hand, it’s always possible for professional investors to avoid a company because they think it’s not the best place for their money. Institutional investors may not find the company’s historic growth impressive, or there may be other factors at play. You can see Launch Tech’s past revenue performance, for yourself, below.
Launch Tech is not a hedge fund. The company’s CEO, Xin Liu, is the largest shareholder with 18% of the outstanding shares. With 14% and 11% of the outstanding shares respectively, Shenzhen Langqu Technology Development Company Limited and Shenzhen De Shi Yu are the second and third largest shareholders.
Our studies suggest that the top 7 shareholders collectively control less than half of the company’s shares, which means that the shares of the company are widely distributed and there is no dominant shareholder.
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. Our information suggests there is no analyst coverage of the stock, so it is likely little known.
Launch Tech Insider Property
The definition of an insider may differ slightly from country to country, but board members still matter. 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.
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.
It appears that insiders hold a large share of Launch Tech Company Limited. Insiders hold a HK$204 million stake in the HK$1.1 billion venture. It’s great to see insiders so invested in the company. It might be worth checking to see if these insiders have bought recently.
General public property
The general public – including retail investors – owns 57% of Launch Tech. This level of ownership gives mainstream investors some power to influence key policy decisions such as board composition, executive compensation and dividend payout ratio.
Private Company Ownership
We can see that private companies hold 25% of the issued shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
I find it very interesting to see who exactly owns a company. But to really get insight, we also need to consider other information. For example, we have identified 1 warning sign for Launch Tech of which you should be aware.
Sure this may not be the best stock to buy. So take a look at this free free list of interesting companies.
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 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.
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