Individual investors own 37% of LHN Limited (SGX:41O) shares but private companies control 55% of the company

editorial-team@simplywallst.com (Simply Wall St)

Mon, Aug 12, 2024, 5:55 PM 4 min read

Significant control over LHN by private companies implies that the general public has more power to influence management and governance-related decisions
55% of the company is held by a single shareholder (Lhn Capital Pte Ltd.)
Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

A look at the shareholders of LHN Limited (SGX:41O) can tell us which group is most powerful. With 55% stake, private companies possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Individual investors, on the other hand, account for 37% of the company's stockholders.

In the chart below, we zoom in on the different ownership groups of LHN.

See our latest analysis for LHN

ownership-breakdown — SGX:41O Ownership Breakdown August 12th 2024

What Does The Institutional Ownership Tell Us About LHN?

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.

Since institutions own only a small portion of LHN, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. 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 — SGX:41O Earnings and Revenue Growth August 12th 2024

Hedge funds don't have many shares in LHN. Our data shows that Lhn Capital Pte Ltd. is the largest shareholder with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 4.2% of the shares outstanding, followed by an ownership of 1.0% by the third-largest shareholder. Bee Choo Lim, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of LHN

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can see that insiders own shares in LHN Limited. In their own names, insiders own S$9.3m worth of stock in the S$134m company. Some would say this shows alignment of interests between shareholders and the board, though we generally prefer to see bigger insider holdings. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public-- including retail investors -- own 37% stake in the company, and hence can't easily be ignored. 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

It seems that Private Companies own 55%, of the LHN stock. 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 LHN better, we need to consider many other factors. To that end, you should learn about the 5 warning signs we've spotted with LHN (including 1 which shouldn't be ignored) .

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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.

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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.