Key Insights

• Significant insider control over L.K. Technology Holdings implies vested interests in company growth
• 63% of the company is held by a single shareholder (Siw Yin Chong)
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls L.K. Technology Holdings Limited (HKG:558), then you'll have to look at the makeup of its share registry. With 63% stake, individual insiders 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).

And following last week's 12% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about L.K. Technology Holdings.

What Does The Institutional Ownership Tell Us About L.K. Technology Holdings?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

L.K. Technology Holdings already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see L.K. Technology Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in L.K. Technology Holdings. From our data, we infer that the largest shareholder is Siw Yin Chong (who also holds the title of Top Key Executive) with 63% of shares outstanding. Its usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider play the role of a key stakeholder. With 1.3% and 1.0% of the shares outstanding respectively, Norges Bank Investment Management and The Vanguard Group, Inc. are the second and third largest shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of L.K. Technology Holdings

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

It seems that insiders own more than half the L.K. Technology Holdings Limited stock. This gives them a lot of power. So they have a HK$2.1b stake in this HK$3.4b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in L.K. Technology Holdings. 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that L.K. Technology Holdings is showing 2 warning signs in our investment analysis , and 1 of those can't be ignored...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.