Individual investors invested in Hynar Water Group Co., Ltd. (SZSE:300961) up 23% last week, insiders too were rewarded

Key Insights

• The considerable ownership by individual investors in Hynar Water Group indicates that they collectively have a greater say in management and business strategy
• 49% of the business is held by the top 16 shareholders
• Insider ownership in Hynar Water Group is 35%

Every investor in Hynar Water Group Co., Ltd. (SZSE:300961) should be aware of the most powerful shareholder groups. We can see that individual investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While individual investors were the group that benefitted the most from last week’s CN¥431m market cap gain, insiders too had a 35% share in those profits.

In the chart below, we zoom in on the different ownership groups of Hynar Water Group.

See our latest analysis for Hynar Water Group

What Does The Institutional Ownership Tell Us About Hynar Water Group?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Hynar Water Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 Hynar Water 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 Hynar Water Group. The company's CEO Haibo Li is the largest shareholder with 25% of shares outstanding. Qin Li is the second largest shareholder owning 11% of common stock, and Shenzhen Shenshui Investment Partnership Enterprise (L.P.) holds about 5.9% of the company stock.

Our studies suggest that the top 16 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hynar Water 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.

Our most recent data indicates that insiders own a reasonable proportion of Hynar Water Group Co., Ltd.. Insiders own CN¥820m worth of shares in the CN¥2.3b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public -- including retail investors -- own 51% of Hynar Water Group. 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.

Private Company Ownership

Our data indicates that Private Companies hold 7.0%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hynar Water Group better, we need to consider many other factors. For example, we've discovered 3 warning signs for Hynar Water Group that you should be aware of before investing here.

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.