Mega Genomics Limited (HKG:6667) Share Price Falls 10% Last Week; private companies would not be happy

A look at the shareholders of Mega Genomics Limited (HKG:6667) can tell us which group is the most powerful. The group with the largest number of shares in the company, around 35% to be precise, are private companies. In other words, the group faces the maximum upside potential (or downside risk).

While insiders who hold 31% have been under pressure after the market capitalization fell to HK$3.0 billion last week, private companies suffered the most losses.

Let’s dive deeper into each owner type in Mega Genomics, starting with the table below.

Check out our latest analysis for Mega Genomics

SEHK: 6667 Ownership Breakdown September 30, 2022

What does the lack of institutional ownership tell us about mega genomics?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their liking. But it’s unusual to see large companies without institutional investors.

There can be various reasons why no institution owns shares in a company. Typically, small newly listed companies do not attract much attention from fund managers, as it would not be possible for large fund managers to gain a significant position in the company. Alternatively, there could be something about the company that has kept institutional investors away. Institutional investors may not find the company’s historic growth impressive, or there may be other factors at play. You can see Mega Genomics’ past revenue performance for yourself below.

earnings-and-revenue-growth
SEHK: 6667 Earnings and Revenue Growth September 30, 2022

Mega Genomics is not owned by hedge funds. Our data shows that Meinian Onehealth Healthcare Holdings Co., Ltd. is the main shareholder with 16% of the outstanding shares. For context, the second shareholder owns approximately 9.2% of the outstanding shares, followed by a 6.1% ownership by the third shareholder.

Upon closer inspection, we found that more than half of the company’s shares are held by the top 8 shareholders, suggesting that the interests of the larger shareholders are to some extent balanced by those of the smaller ones.

While it makes sense to study data on a company’s institutional ownership, it also makes sense to study analyst sentiment to find out which way the wind is blowing. There is some analyst coverage of the stock, but it could still become better known over time.

Insider ownership of Mega Genomics

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.

It appears that insiders own a large share of Mega Genomics Limited. Its market capitalization is only HK$3.0 billion and insiders hold HK$929 million worth of shares in their own name. 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, including retail investors, owns 16% of the company’s capital and therefore cannot be easily ignored. 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 35% of the issued shares. It’s hard to draw conclusions from this fact alone, so it’s worth investigating 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.

Ownership of a public company

Public companies currently hold 18% of Mega Genomics 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.

Next steps:

While it is worth considering the different groups that own a business, there are other, even more important factors. For example, we have identified 1 warning sign for Mega Genomics of which you should be aware.

But finally it’s the future, not the past, which will determine the performance of the owners of this company. Therefore, we think it’s advisable to take a look at this free report showing whether analysts are predicting a brighter 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 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.

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Karen J. Nelson