private companies who own 56% along with institutions invested in Kweichow Moutai Co., Ltd. (SHSE:600519) saw increase in their holdings value last week

Key Insights

• Significant control over Kweichow Moutai by private companies implies that the general public has more power to influence management and governance-related decisions
• 56% of the company is held by a single shareholder (China Kweichow Moutai Distillery(Group)Co,.Ltd)
• 25% of Kweichow Moutai is held by Institutions

To get a sense of who is truly in control of Kweichow Moutai Co., Ltd. (SHSE:600519), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 56% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While private companies were the group that reaped the most benefits after last week’s 3.6% price gain, institutions also received a 25% cut.

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

Check out our latest analysis for Kweichow Moutai

What Does The Institutional Ownership Tell Us About Kweichow Moutai?

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.

We can see that Kweichow Moutai 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. 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 Kweichow Moutai's earnings history below. Of course, the future is what really matters.

Kweichow Moutai is not owned by hedge funds. Our data shows that China Kweichow Moutai Distillery(Group)Co,.Ltd is the largest shareholder with 56% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. For context, the second largest shareholder holds about 6.4% of the shares outstanding, followed by an ownership of 4.5% by the third-largest shareholder.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Kweichow Moutai

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.

We note our data does not show any board members holding shares, personally. It is unusual not to have at least some personal holdings by board members, so our data might be flawed. A good next step would be to check how much the CEO is paid.

General Public Ownership

The general public, who are usually individual investors, hold a 19% stake in Kweichow Moutai. 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 56%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Kweichow Moutai you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.

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

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.