Retail investors invested in Hebei Hengshui Laobaigan Liquor Co., Ltd. (SHSE:600559) copped the brunt of last week's CN¥1.0b market cap decline

Key Insights

• Significant control over Hebei Hengshui Laobaigan Liquor by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 45% of the company
• 19% of Hebei Hengshui Laobaigan Liquor is held by Institutions

A look at the shareholders of Hebei Hengshui Laobaigan Liquor Co., Ltd. (SHSE:600559) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And last week, retail investors endured the biggest losses as the stock fell by 5.2%.

Let's delve deeper into each type of owner of Hebei Hengshui Laobaigan Liquor, beginning with the chart below.

View our latest analysis for Hebei Hengshui Laobaigan Liquor

What Does The Institutional Ownership Tell Us About Hebei Hengshui Laobaigan Liquor?

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.

As you can see, institutional investors have a fair amount of stake in Hebei Hengshui Laobaigan Liquor. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Hebei Hengshui Laobaigan Liquor's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Hebei Hengshui Laobaigan Liquor. Looking at our data, we can see that the largest shareholder is Hebei Hengshui Laobaigan Liquor-Making (group) Co. with 25% of shares outstanding. With 4.9% and 2.8% of the shares outstanding respectively, China Merchants Fund Management Company Ltd. and China Universal Asset Management Company Ltd. are the second and third largest shareholders.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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 Hebei Hengshui Laobaigan Liquor

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.

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 Hebei Hengshui Laobaigan Liquor 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. Keep in mind that it's a big company, and the insiders own CN¥56m worth of shares. The absolute value might be more important than the proportional share. It is always good to see at least some insider ownership, but it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a substantial 55% stake in Hebei Hengshui Laobaigan Liquor, suggesting it is a fairly popular stock. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

Private Company Ownership

We can see that Private Companies own 26%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hebei Hengshui Laobaigan Liquor better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Hebei Hengshui Laobaigan Liquor you should know about.

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.