Emei Shan Tourism Co.,Ltd's (SZSE:000888) stock price dropped 6.4% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Emei Shan TourismLtd indicates that they collectively have a greater say in management and business strategy
• The top 10 shareholders own 50% of the company
• Institutions own 18% of Emei Shan TourismLtd

To get a sense of who is truly in control of Emei Shan Tourism Co.,Ltd (SZSE:000888), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 42% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 6.4% decline in share price, retail investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Emei Shan TourismLtd.

See our latest analysis for Emei Shan TourismLtd

What Does The Institutional Ownership Tell Us About Emei Shan TourismLtd?

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.

Emei Shan TourismLtd 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. 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 Emei Shan TourismLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Emei Shan TourismLtd. The company's largest shareholder is Sichuan Emeishan Leshan Buddha Tourism Group Corporation, with ownership of 33%. Leshan Hongzhushan Hotel is the second largest shareholder owning 7.0% of common stock, and National Council for Social Security Fund holds about 2.2% of the company stock.

On further inspection, we found that more than half the company's shares are owned by the top 10 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Emei Shan TourismLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Our data suggests that insiders own under 1% of Emei Shan Tourism Co.,Ltd in their own names. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It seems the board members have no more than CN¥23k worth of shares in the CN¥6.1b company. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

With a 42% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Emei Shan TourismLtd. 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.

Private Company Ownership

We can see that Private Companies own 40%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 3 warning signs for Emei Shan TourismLtd that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.