Private companies in Bright Dairy & Food Co.,Ltd (SHSE:600597) are its biggest bettors, and their bets paid off as stock gained 4.6% last week

Key Insights

• The considerable ownership by private companies in Bright Dairy & FoodLtd indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Bright Food (Group) Co., Ltd. with a 52% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Bright Dairy & Food Co.,Ltd (SHSE:600597), it is important to understand the ownership structure of the business. With 52% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, private companies were the biggest beneficiaries of last week’s 4.6% gain.

Let's delve deeper into each type of owner of Bright Dairy & FoodLtd, beginning with the chart below.

Check out our latest analysis for Bright Dairy & FoodLtd

What Does The Institutional Ownership Tell Us About Bright Dairy & FoodLtd?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

As you can see, institutional investors have a fair amount of stake in Bright Dairy & FoodLtd. 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. 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 Bright Dairy & FoodLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Bright Dairy & FoodLtd is not owned by hedge funds. Bright Food (Group) Co., Ltd. is currently the company's largest shareholder with 52% of shares outstanding. This implies that they have majority interest control of the future of the company. With 1.6% and 1.3% of the shares outstanding respectively, ICBC Credit Suisse Asset Management Co., Ltd. and National Council for Social Security Fund are the second and third largest shareholders.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Bright Dairy & FoodLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our data suggests that insiders own under 1% of Bright Dairy & Food Co.,Ltd in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. Keep in mind that it's a big company, and the insiders own CN¥133k worth of shares. The absolute value might be more important than the proportional share. Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Bright Dairy & FoodLtd. 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 52%, of the company's shares. 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. Take risks for example - Bright Dairy & FoodLtd has 3 warning signs (and 1 which doesn't sit too well with us) we think 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.