CITIC Niya Wine Co., Ltd.'s (SHSE:600084) stock price dropped 5.8% last week; private companies would not be happy

Key Insights

• The considerable ownership by private companies in CITIC Niya Wine indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 56% of the company
• Insider ownership in CITIC Niya Wine is 12%

A look at the shareholders of CITIC Niya Wine Co., Ltd. (SHSE:600084) can tell us which group is most powerful. With 47% 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.

And last week, private companies endured the biggest losses as the stock fell by 5.8%.

In the chart below, we zoom in on the different ownership groups of CITIC Niya Wine.

View our latest analysis for CITIC Niya Wine

What Does The Lack Of Institutional Ownership Tell Us About CITIC Niya Wine?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. CITIC Niya Wine's earnings and revenue track record (below) may not be compelling to institutional investors -- or they simply might not have looked at the business closely.

CITIC Niya Wine is not owned by hedge funds. The company's largest shareholder is CITIC Guoan Group Corporation, with ownership of 45%. Meanwhile, the second and third largest shareholders, hold 11% and 1.8%, of the shares outstanding, respectively.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 56% stake.

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 CITIC Niya Wine

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.

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 CITIC Niya Wine Co., Ltd.. Insiders have a CN¥798m stake in this CN¥6.8b business. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 41% stake in CITIC Niya Wine. 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

Our data indicates that Private Companies hold 47%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand CITIC Niya Wine better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for CITIC Niya Wine you should be aware of.

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.