Posted on December 10, 2023
To get a sense of who is truly in control of COSCO SHIPPING Ports Limited (HKG:1199), it is important to understand the ownership structure of the business. With 64% stake, public companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).
Institutions, on the other hand, account for 20% of the company’s stockholders. Generally speaking, as a company grows, institutions will increase their ownership. Conversely, insiders often decrease their ownership over time.
In the chart below, we zoom in on the different ownership groups of COSCO SHIPPING Ports.
SEHK:1199 Ownership Breakdown December 6th 2023
What Does The Institutional Ownership Tell Us About COSCO SHIPPING Ports?
Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.
As you can see, institutional investors have a fair amount of stake in COSCO SHIPPING Ports. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of COSCO SHIPPING Ports, (below). Of course, keep in mind that there are other factors to consider, too.
SEHK:1199 Earnings and Revenue Growth December 6th 2023
COSCO SHIPPING Ports is not owned by hedge funds. Our data shows that COSCO SHIPPING Holdings Co., Ltd. is the largest shareholder with 64% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 6.9% and 2.1% of the shares outstanding respectively, Silchester International Investors LLP and BlackRock, Inc. are the second and third largest shareholders.
While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.
Insider Ownership Of COSCO SHIPPING Ports
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.
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 less than 1% of COSCO SHIPPING Ports Limited. Keep in mind that it’s a big company, and the insiders own HK$6.0m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.
General Public Ownership
With a 16% ownership, the general public, mostly comprising of individual investors, have some degree of sway over COSCO SHIPPING Ports. While this group can’t necessarily call the shots, it can certainly have a real influence on how the company is run.
Public Company Ownership
We can see that public companies hold 64% of the COSCO SHIPPING Ports 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.