Key Insights

• Significant insider control over EEKA Fashion Holdings implies vested interests in company growth
• 64% of the business is held by the top 2 shareholders
• Insiders have been buying lately

If you want to know who really controls EEKA Fashion Holdings Limited (HKG:3709), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

Having purchased shares recently, insiders must be glad after market cap hit HK$6.8b last week.

Let's delve deeper into each type of owner of EEKA Fashion Holdings, beginning with the chart below.

What Does The Institutional Ownership Tell Us About EEKA Fashion 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.

We can see that EEKA Fashion Holdings does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at EEKA Fashion Holdings' earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in EEKA Fashion Holdings. With a 36% stake, CEO Ming Jin is the largest shareholder. Rui Jin is the second largest shareholder owning 28% of common stock, and CA Indosuez (Switzerland) S.A. holds about 8.5% of the company stock. Interestingly, the second-largest shareholder, Rui Jin is also Senior Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of EEKA Fashion Holdings

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 EEKA Fashion Holdings Limited stock. This gives them a lot of power. That means they own HK$4.3b worth of shares in the HK$6.8b company. That's quite meaningful. 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 26% stake in EEKA Fashion Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand EEKA Fashion Holdings better, we need to consider many other factors. Case in point: We've spotted 2 warning signs for EEKA Fashion Holdings you should be aware of.

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.