With 62% ownership, C.I. Holdings Berhad (KLSE:CIHLDG) insiders have a lot at stake

Simply Wall St

Sun, Nov 13, 2022, 7:40 PM 4 min read

To get a sense of who is truly in control of C.I. Holdings Berhad (KLSE:CIHLDG), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 62% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of C.I. Holdings Berhad regarding the company's future would be crucial to them.

Let's take a closer look to see what the different types of shareholders can tell us about C.I. Holdings Berhad.

View our latest analysis for C.I. Holdings Berhad

ownership-breakdown — KLSE:CIHLDG Ownership Breakdown November 14th 2022

What Does The Institutional Ownership Tell Us About C.I. Holdings Berhad?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

Institutions have a very small stake in C.I. Holdings Berhad. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

earnings-and-revenue-growth — KLSE:CIHLDG Earnings and Revenue Growth November 14th 2022

Hedge funds don't have many shares in C.I. Holdings Berhad. Johari Bin Abdul Ghani is currently the largest shareholder, with 33% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 8.0% and 6.8%, of the shares outstanding, respectively. Cheang Lee, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors. Additionally, the company's CEO Joha Bin Megat Abdul Rahman directly holds 0.6% of the total shares outstanding.

Our research also brought to light the fact that roughly 54% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of C.I. Holdings Berhad

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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

Our information suggests that insiders own more than half of C.I. Holdings Berhad. This gives them effective control of the company. Given it has a market cap of RM475m, that means they have RM296m worth of shares. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in C.I. Holdings Berhad. 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.

Private Company Ownership

We can see that Private Companies own 25%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - C.I. Holdings Berhad has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.

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