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The big shareholder groups in China Chunlai Education Group Co., Ltd. (HKG:1969) have power over the company. Institutions often own shares in more established companies, while it’s not unusual to see insiders own a fair bit of smaller companies. Warren Buffett said that he likes ‘a business with enduring competitive advantages that is run by able and owner-oriented people’. So it’s nice to see some insider ownership, because it may suggest that management is owner-oriented.

With a market capitalization of HK$1.9b, China Chunlai Education Group is a small cap stock, so it might not be well known by many institutional investors. In the chart below below, we can see that institutional investors have not yet purchased shares. Let’s delve deeper into each type of owner, to discover more about 1969.

View our latest analysis for China Chunlai Education Group

What Does The Lack Of Institutional Ownership Tell Us About China Chunlai Education Group?

Small companies that are not very actively traded often lack institutional investors, but it’s less common to see large companies without them.

There are multiple explanations for why institutions don’t own a stock. The most common is that the company is too small relative to fund under management, so the institition 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. China Chunlai Education Group’s earnings and revenue track record (below) may not be compelling to institutional investors — or they simply might not have looked at the business closely.

China Chunlai Education Group is not owned by hedge funds. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of China Chunlai Education Group

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

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 most recent data indicates that insiders own the majority of China Chunlai Education Group Co., Ltd.. This means they can collectively make decisions for the company. So they have a HK$1.4b stake in this HK$1.9b business. 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 have some degree of sway over 1969. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 5.5%, 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.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.

The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at editorial-team@simplywallst.com.