Is Limited Chinese Literature (HKG: 772) popular among institutions?


If you want to know who really controls China Literature Limited (HKG: 772), then you will have to look at the makeup of its share register. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Companies that have been privatized tend to have low insider ownership.

China Literature has a market cap of HK $ 60 billion, so it’s too big to go unnoticed. We expect institutions and retail investors to own a portion of the company. Looking at our data on ownership groups (below), it appears that institutions own shares in the company. Let’s dig deeper into each type of owner, to learn more about Chinese literature.

See our latest analysis for Chinese literature

SEHK: 772 Ownership Breakdown October 22, 2021

What does institutional ownership tell us about Chinese literature?

Institutional investors generally compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.

We see that Chinese literature has institutional investors; and they own a good portion of the company’s shares. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it’s worth reviewing China Literature’s earning history below. Of course, the future is what really matters.

profit and revenue growth
SEHK: 772 Growth in profit and revenue on October 22, 2021

We note that hedge funds do not have a significant investment in Chinese literature. Looking at our data, we can see that the largest shareholder is Tencent Holdings Limited with 57% of the shares outstanding. This implies that they have majority control over the future of the business. Huayi Cao is the second largest shareholder holding 3.3% of the common stock, and The Vanguard Group, Inc. owns about 1.5% of the company’s stock.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. There are a reasonable number of analysts covering the stock, so it can be helpful to know their overall vision for the future.

Insider property of Chinese literature

The definition of an insider may differ slightly from country to country, but board members still count. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member of the board.

Most view insider ownership as a positive, as it can indicate that the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

We can see that the insiders own shares in China Literature Limited. It’s a pretty big company, so it’s generally positive to see a potentially meaningful alignment. In this case, they own around HK $ 2.1 billion of shares (at current prices). If you would like to explore the issue of Insider Alignment, you can click here to see if any Insiders have bought or sold.

General public property

With 31% ownership, the general public has some influence over Chinese literature. While this property size may not be enough to influence a policy decision in their favor, they can still have a collective impact on company policies.

Public enterprise ownership

It seems to us that state-owned companies own 57% of China Literature. It’s hard to say for sure, but it suggests that they have intertwined business interests. This can be a strategic issue, so it’s worth watching this space for changes in ownership.

Next steps:

It’s always worth thinking about the different groups that own shares in a company. But to understand Chinese literature better, there are many other factors to consider. To do this, you need to know the 1 warning sign we spotted with China Literature.

But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last day of the month of date of the financial statement. This may not be consistent with the figures in the annual report for the entire year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts using only unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.

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