Home Private Equity Qingdao AInnovation Technology Group Co., Ltd.’s (HKG:2121) market cap dropped HK$757m last...

Qingdao AInnovation Technology Group Co., Ltd.’s (HKG:2121) market cap dropped HK$757m last week; Private equity firms bore the brunt

51
0

Key Insights

  • The considerable ownership by private equity firms in Qingdao AInnovation Technology Group indicates that they collectively have a greater say in management and business strategy
  • A total of 4 investors have a majority stake in the company with 53% ownership
  • Insiders have bought recently

Every investor in Qingdao AInnovation Technology Group Co., Ltd. (HKG:2121) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 35% to be precise, is private equity firms. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to HK$3.4b last week, private equity firms would have faced the highest losses than any other shareholder groups of the company.

Let’s take a closer look to see what the different types of shareholders can tell us about Qingdao AInnovation Technology Group.

View our latest analysis for Qingdao AInnovation Technology Group

SEHK:2121 Ownership Breakdown February 5th 2024

What Does The Institutional Ownership Tell Us About Qingdao AInnovation Technology Group?

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.

We can see that Qingdao AInnovation Technology Group does have institutional investors; and they hold a good portion of the company’s stock. 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 Qingdao AInnovation Technology Group, (below). Of course, keep in mind that there are other factors to consider, too.

SEHK:2121 Earnings and Revenue Growth February 5th 2024

Hedge funds don’t have many shares in Qingdao AInnovation Technology Group. The company’s largest shareholder is Sinovation Ventures (Beijing) Enterprise Management Limited, with ownership of 26%. Meanwhile, the second and third largest shareholders, hold 11% and 8.9%, of the shares outstanding, respectively. Hui Xu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock’s expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Qingdao AInnovation Technology Group

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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 information suggests that insiders maintain a significant holding in Qingdao AInnovation Technology Group Co., Ltd.. Insiders have a HK$640m stake in this HK$3.4b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 29% stake in Qingdao AInnovation Technology Group. 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 Equity Ownership

Private equity firms hold a 35% stake in Qingdao AInnovation Technology Group. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Private Company Ownership

Our data indicates that Private Companies hold 5.5%, of the company’s shares. 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:

It’s always worth thinking about the different groups who own shares in a company. But to understand Qingdao AInnovation Technology Group better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Qingdao AInnovation Technology Group is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

View the Free Analysis

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.

Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here