Individual investors invested in Chengdu Hongqi Chain Co.,Ltd. (SZSE:002697) up 8.9% last week, insiders too were rewarded

Key Insights

• Chengdu Hongqi ChainLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 5 shareholders
• Insider ownership in Chengdu Hongqi ChainLtd is 21%

If you want to know who really controls Chengdu Hongqi Chain Co.,Ltd. (SZSE:002697), then you'll have to look at the makeup of its share registry. We can see that individual investors own the lion's share in the company with 39% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While individual investors were the group that benefitted the most from last week’s CN¥666m market cap gain, insiders too had a 21% share in those profits.

Let's delve deeper into each type of owner of Chengdu Hongqi ChainLtd, beginning with the chart below.

See our latest analysis for Chengdu Hongqi ChainLtd

What Does The Institutional Ownership Tell Us About Chengdu Hongqi ChainLtd?

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.

Chengdu Hongqi ChainLtd 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Chengdu Hongqi ChainLtd, (below). Of course, keep in mind that there are other factors to consider, too.

It looks like hedge funds own 17% of Chengdu Hongqi ChainLtd shares. That's interesting, because hedge funds can be quite active and activist. Many look for medium term catalysts that will drive the share price higher. The company's CEO Shiru Cao is the largest shareholder with 18% of shares outstanding. Sichuan Commercial Investment Co., Ltd. is the second largest shareholder owning 17% of common stock, and Yonghui Superstores Co., Ltd. holds about 11% of the company stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Chengdu Hongqi ChainLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Chengdu Hongqi Chain Co.,Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.7b stake in this CN¥8.1b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 39% 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.

Public Company Ownership

We can see that public companies hold 11% of the Chengdu Hongqi ChainLtd shares on issue. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Chengdu Hongqi ChainLtd has 1 warning sign we think you should be aware of.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.