Individual investors among Long Yuan Construction Group Co., Ltd.'s (SHSE:600491) largest stockholders and were hit after last week's 10% price drop

Key Insights

• Long Yuan Construction Group's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 25 investors have a majority stake in the company with 42% ownership
• 34% of Long Yuan Construction Group is held by insiders

If you want to know who really controls Long Yuan Construction Group Co., Ltd. (SHSE:600491), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 58% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 34% came under pressure after market cap dropped to CN¥3.9b last week,individual investors took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Long Yuan Construction Group.

See our latest analysis for Long Yuan Construction Group

What Does The Institutional Ownership Tell Us About Long Yuan Construction 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.

As you can see, institutional investors have a fair amount of stake in Long Yuan Construction Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Long Yuan Construction Group's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Long Yuan Construction Group. Our data shows that Zhenyuan Lai is the largest shareholder with 17% of shares outstanding. The second and third largest shareholders are Chao Hui Lai and Zhaohui Lai, with an equal amount of shares to their name at 7.1%.

A deeper look at our ownership data shows that the top 25 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Long Yuan Construction Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own a reasonable proportion of Long Yuan Construction Group Co., Ltd.. Insiders have a CN¥1.3b stake in this CN¥3.9b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 58% of Long Yuan Construction Group shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Long Yuan Construction Group , and understanding them should be part of your investment process.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.