Private companies invested in Hong Fok Corporation Limited (SGX:H30) bore the brunt of the S$70m market capitalization drop last week

If you want to know who actually controls Hong Fok Corporation Limited (SGX:H30), then you will need to look at the composition of its share register. We can see that private companies hold the lion’s share of the business with 40% ownership. In other words, the group faces the maximum upside potential (or downside risk).

As a result, private companies as a group suffered the highest losses last week after the market capitalization plummeted by S$70 million.

Let’s take a closer look at what different types of shareholders can tell us about Hong Fok.

See our latest analysis for Hong Fok

SGX:H30 Ownership Allocation June 14, 2022

What does institutional ownership tell us about Hong Fok?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it is included in a major index. We would expect most companies to have some institutions listed, especially if they are growing.

Institutions have a very small stake in Hong Fok. This indicates that the company is on the radar of some funds, but it is not particularly popular with professional investors at the moment. If the company is increasing its earnings, it may indicate that it is just beginning to attract the attention of those deep-pocketed investors. We sometimes see a rise in the stock price when a few large institutions want to buy a certain stock at the same time. Earnings and revenue history, which you can see below, could be helpful in determining whether more institutional investors will want the stock. Of course, there are also many other factors to consider.

SGX:H30 Earnings and Revenue Growth June 14, 2022

We note that hedge funds have no significant investment in Hong Fok. The company’s largest shareholder is Hong Fok Land Holding Limited with a 21% stake. With 14% and 12% of the outstanding shares respectively, Sim Eng Cheong and PC Cheong Pte Ltd are the second and third largest shareholders. Sim Eng Cheong, who is the second largest shareholder, also holds the title of co-general manager. Additionally, the company’s CEO, Pin Chuan Cheong, directly owns 2.7% of the total shares outstanding.

Our research also brought to light the fact that approximately 52% of the company is controlled by the 4 major shareholders, suggesting that these owners wield significant influence over the company.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be obtained by studying the feelings of the analyst. As far as we can tell, there’s no analyst coverage of the company, so it’s probably flying under the radar.

Hong Fok Insider Property

The definition of company insiders can be subjective and varies from jurisdiction to jurisdiction. Our data reflects individual insiders, capturing at least board members. The management of the company runs the company, but the CEO will answer to the board of directors, even if he is a member of it.

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 hold a significant stake in Hong Fok Corporation Limited. Insiders hold S$199 million worth of shares in the S$775 million company. This may suggest that the founders still own a lot of shares. You can click here to see if they bought or sold.

General public property

The general public, who are usually individual investors, hold a 32% stake in Hong Fok. Although this group may not necessarily make the decisions, they can certainly have a real influence on the way the business is run.

Private Company Ownership

We can see that private companies hold 40% of the shares issued. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this must be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next steps:

It is always useful to think about the different groups that own shares in a company. But to better understand Hong Fok, we need to consider many other factors. Like risks, for example. Every business has them, and we’ve spotted 2 warning signs for Hong Fok (1 of which can’t be ignored!) that you should know about.

Sure, you might find a fantastic investment by looking elsewhere. So take a look at this free list of interesting companies.

NB: The figures in this article are calculated using trailing twelve month data, which refers to the 12 month period ending on the last day of the month in which the financial statements are dated. This may not be consistent with the annual report figures for the full year.

This Simply Wall St article is general in nature. We provide commentary based on historical data and analyst forecasts only using unbiased methodology and our articles are not intended to be financial advice. It is not a recommendation to buy or sell stocks and does not take into account your objectives or financial situation. Our goal is to bring you targeted long-term analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price-sensitive companies or qualitative materials. Simply Wall St has no position in the stocks mentioned.

Luisa D. Fuller