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- SHSE:603348
Wencan Group Co., Ltd.'s (SHSE:603348) stock price dropped 4.9% last week; retail investors would not be happy
Key Insights
- Wencan Group's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
- A total of 9 investors have a majority stake in the company with 50% ownership
- 28% of Wencan Group is held by insiders
If you want to know who really controls Wencan Group Co., Ltd. (SHSE:603348), then you'll have to look at the makeup of its share registry. With 47% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.
While insiders, who own 28% shares weren’t spared from last week’s CN¥409m market cap drop, retail investors as a group suffered the maximum losses
In the chart below, we zoom in on the different ownership groups of Wencan Group.
Check out 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.
Wencan Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Wencan Group's historic earnings and revenue below, but keep in mind there's always more to the story.
Hedge funds don't have many shares in Wencan Group. Looking at our data, we can see that the largest shareholder is the CEO Jie Xiong Tang with 11% of shares outstanding. The second and third largest shareholders are Foshan Shengdezhi Investment Co., Ltd. and Jie Bang Tang, with an equal amount of shares to their name at 11%. Interestingly, the third-largest shareholder, Jie Bang Tang is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.
On further inspection, we found that more than half the company's shares are owned by the top 9 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.
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
While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.
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 is very interesting to see that insiders have a meaningful CN¥2.2b stake in this CN¥7.9b business. 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 47% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.
Private Company Ownership
Our data indicates that Private Companies hold 11%, of the company's shares. 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:
While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Wencan Group (1 is a bit unpleasant) that you should be aware of.
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.
Valuation is complex, but we're here to simplify it.
Discover if Wencan Group might be undervalued or overvalued with our detailed analysis, featuring fair value estimates, potential risks, dividends, insider trades, and its financial condition.
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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.
About SHSE:603348
Wencan Group
Engages in the research and development, production, and sale of automotive aluminum alloy precision die castings in China and internationally.