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What does the ownership structure of China New Higher Education Group Limited (HKG: 2001) look like?

Every investor in China New Higher Education Group Limited (HKG: 2001) should know about the most powerful shareholder groups. Institutions often own shares in more established companies, while it is not uncommon to see insiders owning a good number of smaller companies. Warren Buffett said he enjoys “a business with sustainable competitive advantages, led by skilled people and owner-centered.” So it’s nice to see some insider ownership as it may suggest that the management is owner-driven.

China New Higher Education Group has a market cap of HK $ 9.6 billion, so we would expect some institutional investors to take notice of the action. Looking at our data on ownership groups (below), it looks like institutional investors have bought the company. Let’s take a closer look at what different types of shareholders can tell us about China New Higher Education Group.

Check out our latest analysis for China New Higher Education Group

SEHK: 2001 Distribution of ownership June 7, 2021

What does institutional ownership tell us about the new Chinese higher education group?

Many institutions measure their performance against an index that approximates the local market. Thus, they generally pay more attention to companies that are included in the major indices.

China New Higher Education Group already has institutions listed in the share register. Indeed, they hold a respectable stake in the company. This implies that analysts working for these institutions have reviewed the action and appreciate it. But like everyone else, they could be wrong. If several institutions change their mind about a stock at the same time, you could see the stock price drop quickly. So it is worth looking at the profit history of China New Higher Education Group below. Of course, the future is what really matters.

profit and revenue growth
SEHK: 2001 Profit and Revenue Growth June 7, 2021

Our data indicates that hedge funds own 12% of China New Higher Education Group. This is interesting, because hedge funds can be very active and activist. Many are looking for medium-term catalysts that will drive up the share price. From our data, we deduce that the largest shareholder is Xiaoxuan Li (who also holds the title of Top Key Executive) with 33% of the shares outstanding. This is generally considered a good sign when insiders own a significant number of company shares, and in this case, we are happy to see a company insider playing the role of a key stakeholder. In comparison, the second and third shareholders hold around 11% and 6.2% of the capital.

Looking further, we found that 56% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a say in the decisions of the company.

Institutional ownership research is a good way to assess and filter the expected performance of a stock. The same can be achieved by studying the feelings of analysts. Many analysts cover the stock, so it can be interesting to see what they are forecasting as well.

Insider Ownership of New Chinese Higher Education Group

The definition of an insider may differ slightly from country to country, but board members still count. The management of the company manages the company, but the CEO will report to the board of directors, even if he is a member.

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 retain a significant stake in China New Higher Education Group Limited. It has a market cap of just HK $ 9.6 billion, and insiders have shares worth HK $ 3.1 billion in their own name. It is quite important. Most would say it shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if these insiders have bought or sold.

General public property

The general public, with a 28% stake in the company, will not be easily ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in line with other large shareholders.

Owned by a private company

We can see that the private companies own 17% of the issued shares. It is difficult to draw conclusions from this fact alone, so it is worth considering who owns these private companies. Sometimes insiders or other related parties have an interest in shares of a public company through a separate private company.

Next steps:

I find it very interesting to see who exactly owns a company. But to really get an overview, we have to take other information into account as well. For example, we discovered 4 warning signs for China’s new higher education group (1 makes us a little uncomfortable!) Which you should be aware of before investing here.

But finally it’s the future, not the past, which will determine the success of the owners of this business. Therefore, we believe it is advisable to take a look at this free report showing whether analysts are predicting a better future.

NB: The figures in this article are calculated from data for the last twelve months, which refer to the 12-month period ending on the last date of the month of the date of the financial declaration. This may not be consistent with the figures in the annual report for the entire year.

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This Simply Wall St article is general in nature. It does not constitute a recommendation to buy or sell shares and does not take into account your goals or your financial situation. Our aim is to bring you long-term, targeted analysis based on fundamental data. Note that our analysis may not take into account the latest announcements from price sensitive companies or qualitative documents. Simply Wall St has no position in the mentioned stocks.
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