Insiders with their considerable ownership were the key benefactors as Chahua Modern Housewares Co., Ltd. (SHSE:603615) touches CN¥2.6b market cap

Key Insights

• Significant insider control over Chahua Modern Housewares implies vested interests in company growth
• The top 5 shareholders own 54% of the company
• Institutions own 13% of Chahua Modern Housewares

A look at the shareholders of Chahua Modern Housewares Co., Ltd. (SHSE:603615) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 53% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥319m last week.

In the chart below, we zoom in on the different ownership groups of Chahua Modern Housewares.

Check out our latest analysis for Chahua Modern Housewares

What Does The Institutional Ownership Tell Us About Chahua Modern Housewares?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Chahua Modern Housewares 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. 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 Chahua Modern Housewares' historic earnings and revenue below, but keep in mind there's always more to the story.

Chahua Modern Housewares is not owned by hedge funds. Our data shows that Guan Yu Chen is the largest shareholder with 25% of shares outstanding. With 9.9% and 8.0% of the shares outstanding respectively, Kui Sheng Chen and Ming Sheng Chen are the second and third largest shareholders.

On looking further, we found that 54% 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 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 Chahua Modern Housewares

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Our information suggests that insiders own more than half of Chahua Modern Housewares Co., Ltd.. This gives them effective control of the company. So they have a CN¥1.4b stake in this CN¥2.6b business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Chahua Modern Housewares. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Chahua Modern Housewares better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Chahua Modern Housewares (of which 2 can't be ignored!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com