Hong Leong Finance Limited's (SGX:S41) top owners are private companies with 57% stake, while 33% is held by individual investors

In This Article:

Key Insights

  • Significant control over Hong Leong Finance by private companies implies that the general public has more power to influence management and governance-related decisions

  • Hong Leong Investment Holdings Pte. Ltd. owns 55% of the company

  • Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

Every investor in Hong Leong Finance Limited (SGX:S41) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 57% to be precise, is private companies. Put another way, the group faces the maximum upside potential (or downside risk).

And individual investors on the other hand have a 33% ownership in the company.

Let's delve deeper into each type of owner of Hong Leong Finance, beginning with the chart below.

View our latest analysis for Hong Leong Finance

ownership-breakdown
ownership-breakdown

What Does The Institutional Ownership Tell Us About Hong Leong Finance?

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 Hong Leong Finance does have institutional investors; and they hold a good portion of the company's stock. 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 Hong Leong Finance's historic earnings and revenue below, but keep in mind there's always more to the story.

earnings-and-revenue-growth
earnings-and-revenue-growth

Hong Leong Finance is not owned by hedge funds. Our data shows that Hong Leong Investment Holdings Pte. Ltd. is the largest shareholder with 55% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 3.1% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder. Additionally, the company's CEO Leng Beng Kwek directly holds 1.5% of the total shares outstanding.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.