Stock Analysis

Private companies are Shanghai Laiyifen Co.,Ltd's (SHSE:603777) biggest owners and were rewarded after market cap rose by CN¥558m last week

SHSE:603777
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Key Insights

  • The considerable ownership by private companies in Shanghai LaiyifenLtd indicates that they collectively have a greater say in management and business strategy
  • 53% of the company is held by a single shareholder (Shanghai Aiwu Business Management Co., Ltd.)
  • Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Shanghai Laiyifen Co.,Ltd (SHSE:603777), it is important to understand the ownership structure of the business. With 57% stake, private companies 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.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥558m last week.

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

Check out our latest analysis for Shanghai LaiyifenLtd

ownership-breakdown
SHSE:603777 Ownership Breakdown December 2nd 2024

What Does The Institutional Ownership Tell Us About Shanghai LaiyifenLtd?

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.

Less than 5% of Shanghai LaiyifenLtd is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

earnings-and-revenue-growth
SHSE:603777 Earnings and Revenue Growth December 2nd 2024

Shanghai LaiyifenLtd is not owned by hedge funds. Shanghai Aiwu Business Management Co., Ltd. is currently the largest shareholder, with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. Ruifen Yu is the second largest shareholder owning 3.2% of common stock, and Xiaoming Wang holds about 2.8% of the company stock. Ruifen Yu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Shanghai LaiyifenLtd

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.

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.

Shareholders would probably be interested to learn that insiders own shares in Shanghai Laiyifen Co.,Ltd. It has a market capitalization of just CN¥4.0b, and insiders have CN¥289m worth of shares, in their own names. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 31% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shanghai LaiyifenLtd. 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

It seems that Private Companies own 57%, of the Shanghai LaiyifenLtd stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

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 Shanghai LaiyifenLtd , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.