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HomeEducationHope Education Group Co., Ltd.'s (HKG:1765) biggest owners are private companies who...

Hope Education Group Co., Ltd.’s (HKG:1765) biggest owners are private companies who got richer after stock soared 12% last week

Key insights

  • Significant control of Hope Education Group by private companies implies that this group is likely to have significant control over management and governance-related decisions
  • The top 5 shareholders own 51% of the company
  • owns 17% of Hope Education Group

A look at the shareholders of Hope Education Group Co., Ltd. (HKG:1765) can tell us which group is the most powerful. And the group that holds the biggest piece of the pie is private companies with 43% ownership. In other words, the group faces the maximum upside potential (or downside risk).

As a Result, private companies were the biggest beneficiaries of last week’s gains at 12%.

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

Check out our latest analysis for Hope Education Group

SEHK:1765 Property Breakdown January 25, 2023

What does institutional ownership tell us about Hope Education Group?

Institutional investors usually compare their own returns to the returns of a commonly tracked index. So they generally consider buying larger companies included in the relevant reference index.

We can see that Hope Education Group does indeed have institutional investors; and they own a large portion of the company’s stock. This may indicate that the company has some degree of credibility in the investment community. However, it’s best to be wary of relying on the supposed validation provided by institutional investors. They also get it wrong sometimes. It’s not uncommon to see a big drop in price when two large institutional investors try to sell a stock at the same time. So it’s worth looking at Hope Education Group’s past earnings trajectory (below). Of course, keep in mind that there are other factors to consider as well.

profit and sales growth
SEHK:1765 Profit and revenue growth January 25, 2023

Hedge funds don’t have many shares in Hope Education Group. Looking at our data, we can see that the largest shareholder is Hope Education Investment Limited with 43% of the shares outstanding. China Everbright Assets Management Limited is the second largest shareholder, owning 3.5% of the common stock, and The Vanguard Group, Inc. owns approximately 1.6% of the company’s stock.

To make our research more interesting, we found that the top 5 shareholders control more than half of the company, implying that this group has significant influence over the company’s decision-making.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analysts’ sentiments to know which way the wind is blowing. There are plenty of analysts following the stock, so it might be worth checking out what they’re forecasting as well.

Insider property of Hope Education Group

The definition of a company’s insider can be subjective and varies by jurisdiction. Our data reflects individual insiders, at least board members. The company’s management is accountable to the board of directors, which must represent the interests of the shareholders. In particular, sometimes top managers themselves sit on the board.

Insider ownership is positive when it indicates that leaders think like the real owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders from Hope Education Group Co., Ltd. own less than 1% of the company. However, it is possible that insiders have an indirect interest due to a more complex structure. It has a market capitalization of only HK$6.7 billion and the board only owns HK$9.9 million in its own shares. Many prefer to see a board with larger participations. A good next step could be to Check out this free overview of buying and selling insider information.

General public property

The general public – including private investors – owns a 40% stake in the company and therefore cannot be easily ignored. While this group isn’t necessarily in control, it can certainly have a real impact on how the company is run.

Owned by a private company

We can see that private companies own 43% of the issued shares. It might be worth looking into this in more detail. If related parties, such as insiders, have an interest in one of these private companies, this must be stated in the annual report. Private companies may also have a strategic interest in the company.

Next steps:

While it’s worth considering the different groups that own a business, there are other factors that are even more important. For example, we discovered 3 warning signs for Hope Education Group which you should be aware of before investing here.

But eventually it’s the future, not the past, that will determine how well the owners of this company will do. That’s why we think it’s advisable to take a look this free report shows whether analysts predict a brighter future.

NB: The figures in this article have been calculated on the basis of data for the last 12 months, which relate 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 full year annual report figures.

Valuation is complex, but we help make it simple.

Find out or Hope Education Group may be over or undervalued by reviewing our extensive analysis, including fair value estimates, risks and cautions, dividends, insider trading and financial health.

View the free analysis

This Simply Wall St article is general in nature. We only comment based on historical data and analyst forecasts using an unbiased methodology and our articles are not intended as financial advice. It does not constitute a recommendation to buy or sell any stock and does not take into account your objectives or your financial situation. We aim to provide you with long-term focused analytics driven by fundamental data. Please note that our analysis may not take into account the latest price sensitive company announcements or quality material. Simply Wall St has no exposure to the listed stocks.

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