What you need to know about the composition of investors in the Cogobuy group (HKG: 400)

If you want to know who really controls Cogobuy Group (HKG: 400), then you will have to look at the makeup of its share register. Generally speaking, as a business grows, institutions increase their participation. Conversely, insiders often decrease their ownership over time. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it can suggest that the management is owner-driven.

Cogobuy Group is a small company with a market cap of HK $ 3.5 billion, so it may still go under the radar of many institutional investors. Our analysis of the ownership of the company, below, shows that the institutions are not really present on the share register. We can zoom in on the different ownership groups, to find out more about the Cogobuy Group.

Consult our latest analysis for the Cogobuy group

SEHK: 400 Ownership breakdown on June 23, 2021

What does the lack of institutional ownership tell us about the Cogobuy group?

We don’t tend to see institutional investors owning stocks of very risky, lightly traded, or very small companies. While we sometimes see large companies without registered institutions, this is not particularly common.

There can be various reasons why no institution owns shares in a company. Typically, small newly listed companies do not attract much attention from fund managers, as it would not be possible for large fund managers to acquire a significant position in the company. Alternatively, there could be something about the business that has kept institutional investors out. The Cogobuy Group’s earnings and revenue (below) may not be convincing to institutional investors – or they may simply have not looked at the company closely.

profit and revenue growth
SEHK: 400 Profits and Revenue Growth June 23, 2021

Hedge funds don’t have a lot of shares in Cogobuy Group. The company’s CEO, Jingwei Kang, is the largest shareholder with 46% of the shares outstanding. For context, the second largest shareholder owns around 13% of the outstanding shares, followed by a 0.6% stake by the third largest shareholder. Interestingly, the second largest shareholder, Feng Li, is also Senior Key Executive, again, indicating strong insider ownership among the major shareholders of the company.

A more detailed study of the register of shareholders showed us that 2 of the major shareholders hold a considerable share of the ownership of the company, through their 59% stake.

While studying the institutional ownership of a company can add value to your research, it is also recommended that you research analyst recommendations to better understand the expected performance of a stock. As far as I know, there is no analyst coverage of the company, so it probably goes under the radar.

Insider property of the Cogobuy group

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.

I generally consider insider ownership to be a good thing. However, there are times when it is more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of the Cogobuy Group. This gives them effective control of the business. Since it has a market cap of HK $ 3.5 billion, that means they have stocks worth HK $ 2.1 billion. Most would say this is a positive, showing strong alignment with shareholders. You can click here to see if these insiders have bought or sold.

General public property

With a 40% stake, the general public has some influence over Cogobuy Group. While this group cannot necessarily take the lead, it can certainly have a real influence on how the business is run.

Next steps:

I find it very interesting to see who exactly owns a company. But to really understand better, we have to take other information into account as well. Note that the Cogobuy Group displays 1 warning sign in our investment analysis , you must know…

If you would rather consult with another company – one with potentially superior finances – then don’t miss this free list of interesting companies, supported by solid financial data.

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 date 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.

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