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With a 69% stake, Zhongmin Baihui Retail Group Ltd. (SGX:5SR) insiders have a lot riding on the company

Key Insights

  • Significant insider control over Zhongmin Baihui Retail Group implies vested interests in company growth

  • The top 3 shareholders own 56% of the company

  • Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

Every investor in Zhongmin Baihui Retail Group Ltd. (SGX:5SR) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are individual insiders with 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

So, insiders of Zhongmin Baihui Retail Group have a lot at stake and every decision they make on the company’s future is important to them from a financial point of view.

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Let's take a closer look to see what the different types of shareholders can tell us about Zhongmin Baihui Retail Group.

Check out our latest analysis for Zhongmin Baihui Retail Group

ownership-breakdown
ownership-breakdown

What Does The Lack Of Institutional Ownership Tell Us About Zhongmin Baihui Retail Group?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

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. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Zhongmin Baihui Retail Group, for yourself, below.

earnings-and-revenue-growth
earnings-and-revenue-growth

We note that hedge funds don't have a meaningful investment in Zhongmin Baihui Retail Group. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Zhongmin Baihui Retail Group's case, its Top Key Executive, Swee Keng Lee, is the largest shareholder, holding 24% of shares outstanding. With 22% and 11% of the shares outstanding respectively, Kaitong Chen and Caiye Su are the second and third largest shareholders. Interestingly, the second-largest shareholder, Kaitong Chen is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. 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 Zhongmin Baihui Retail Group

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. 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.

Our most recent data indicates that insiders own the majority of Zhongmin Baihui Retail Group Ltd.. This means they can collectively make decisions for the company. That means they own S$98m worth of shares in the S$142m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Zhongmin Baihui Retail Group. 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

We can see that Private Companies own 11%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhongmin Baihui Retail Group better, we need to consider many other factors. For instance, we've identified 3 warning signs for Zhongmin Baihui Retail Group (2 are concerning) that you should be aware of.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.