After the recent decline, Qianhe Condiment and Food Co., Ltd. (SHSE:603027) CEO Chao Qun Wu's holdings have lost 9.6% of their value

Key Insights

• Qianhe Condiment and Food's significant insider ownership suggests inherent interests in company's expansion
• The top 3 shareholders own 51% of the company
• Institutions own 10% of Qianhe Condiment and Food

Every investor in Qianhe Condiment and Food Co., Ltd. (SHSE:603027) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥1.3b.

Let's take a closer look to see what the different types of shareholders can tell us about Qianhe Condiment and Food.

See our latest analysis for Qianhe Condiment and Food

What Does The Institutional Ownership Tell Us About Qianhe Condiment and Food?

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 Qianhe Condiment and Food. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Qianhe Condiment and Food, (below). Of course, keep in mind that there are other factors to consider, too.

Qianhe Condiment and Food is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Chao Qun Wu with 41% of shares outstanding. For context, the second largest shareholder holds about 9.2% of the shares outstanding, followed by an ownership of 1.3% by the third-largest shareholder.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 Qianhe Condiment and Food

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

It seems that insiders own more than half the Qianhe Condiment and Food Co., Ltd. stock. This gives them a lot of power. That means insiders have a very meaningful CN¥6.3b stake in this CN¥12b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 39% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Qianhe Condiment and Food better, we need to consider many other factors. For example, we've discovered 1 warning sign for Qianhe Condiment and Food that you should be aware of before investing here.

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.

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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.