Every investor in Lufax Holding Ltd (NYSE:LU) should know the most powerful shareholder groups. Generally speaking, as a company grows, institutions increase their ownership. Conversely, insiders often decrease their ownership over time. Companies that were previously publicly owned tend to have less insider ownership.
With a market capitalization of US$12 billion, Lufax Holding is quite large. We expect to see institutional investors on the register. Companies of this size are also generally well known to retail investors. Looking at our ownership group data (below), it appears that institutions own shares in the company. Let’s take a closer look at what different types of shareholders can tell us about Lufax Holding.
Check out our latest analysis for Lufax Holding
What does institutional ownership tell us about Lufax Holding?
Institutional investors typically compare their own returns to the returns of a commonly tracked index. They therefore generally consider buying larger companies that are included in the relevant benchmark.
Lufax Holding already has institutions registered in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the stock and like it. But like everyone else, they can be wrong. If multiple institutions change their minds on a stock at the same time, you could see the stock price drop quickly. It is therefore worth checking out the earnings history of Lufax Holding below. Of course, the future is what really matters.
We note that hedge funds have no significant investment in Lufax Holding. Looking at our data, we can see that the major shareholder is Tun Kung Company Limited with 27% of the outstanding shares. Ping An Insurance (Group) Company of China, Ltd. is the second largest shareholder with 23% of common shares, and Ping An of China Asset Management (Hong Kong) Company Limited owns approximately 15% of the company’s shares.
To make our study more interesting, we found that the top 2 shareholders hold a majority stake in the company, which means they are powerful enough to influence company decisions.
Institutional ownership research is a good way to assess and filter a stock’s expected performance. The same can be obtained by studying the feelings of the analyst. There are a reasonable number of analysts covering the stock, so it might be useful to know their overall view on the future.
Insider ownership of Lufax Holding
The definition of an insider may differ slightly from country to country, but board members still matter. The management of the company answers to the board of directors and the latter must represent the interests of the shareholders. In particular, sometimes the senior executives themselves sit on the board of directors.
Most view insider ownership as a positive because it can indicate that the board is well aligned with other shareholders. However, there are times when too much power is concentrated within this group.
Our most recent data indicates that insiders own less than 1% of Lufax Holding Ltd. We note, however, that insiders may have an indirect interest through a private company or other corporate structure. It’s a very big company, so it would be surprising to see insiders owning much of the company. Although their stake is less than 1%, we can see that the board members collectively own $100 million worth of stock (at today’s prices). It’s always good to see at least some insider ownership, but it might be worth checking to see if those insiders have sold.
General public property
The general public, including retail investors, owns 20% of the company’s capital and therefore cannot be easily ignored. While this size of ownership may not be enough to sway a policy decision in their favor, they can still have a collective impact on company policies.
Private Company Ownership
We can see that private companies hold 27% of the issued shares. It might be worth exploring this further. If related parties, such as insiders, have an interest in any of these private companies, this should be disclosed in the annual report. Private companies may also have a strategic interest in the company.
Ownership of a public company
We can see that public companies own 23% of Lufax Holding’s outstanding shares. It may be a strategic interest and both companies may have related business interests. They may have separated. This exploitation probably deserves further investigation.
While it is worth considering the different groups that own a business, there are other, even more important factors. Like risks, for example. Every business has them, and we’ve spotted 2 warning signs for Lufax Holding (1 of which is a little unpleasant!) that you should know about.
If you’re like me, you might want to ask yourself if this business will grow or shrink. Luckily, you can check out this free report showing analyst predictions for its future.
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.
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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.