Wencan Group Co., Ltd. (SHSE:603348) CEO Jie Xiong Tang's holdings dropped 6.3% in value as a result of the recent pullback

Key Insights

• Insiders appear to have a vested interest in Wencan Group's growth, as seen by their sizeable ownership
• A total of 5 investors have a majority stake in the company with 55% ownership
• Institutions own 16% of Wencan Group

To get a sense of who is truly in control of Wencan Group Co., Ltd. (SHSE:603348), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 6.3% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of Wencan Group, beginning with the chart below.

View our latest analysis for Wencan Group

What Does The Institutional Ownership Tell Us About Wencan Group?

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

We can see that Wencan Group 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Wencan Group's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Wencan Group. The company's CEO Jie Xiong Tang is the largest shareholder with 19% of shares outstanding. The second and third largest shareholders are Jie Bang Tang and Foshan Shengdezhi Investment Co., Ltd., with an equal amount of shares to their name at 9.7%.

On looking further, we found that 55% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Wencan Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Wencan Group Co., Ltd.. It has a market capitalization of just CN¥7.5b, and insiders have CN¥2.9b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 35% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

We can see that Private Companies own 9.7%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wencan Group better, we need to consider many other factors. For example, we've discovered 2 warning signs for Wencan Group that you should be aware of before investing here.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

NB: Figures in this article are calculated using data from the last twelve months, which refer to the 12-month period ending on the last date of the month the financial statement is dated. This may not be consistent with full year annual report figures.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.