Suzhou Weizhixiang Food Co., Ltd.'s (SHSE:605089) largest shareholder, CEO Jing Xia sees holdings value fall by 9.4% following recent drop

Key Insights

• Significant insider control over Suzhou Weizhixiang Food implies vested interests in company growth
• 56% of the company is held by a single shareholder (Jing Xia)
• Using data from analyst forecasts alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Suzhou Weizhixiang Food Co., Ltd. (SHSE:605089), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 67% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 9.4% decline in share price, insiders suffered the most losses.

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

Check out our latest analysis for Suzhou Weizhixiang Food

What Does The Institutional Ownership Tell Us About Suzhou Weizhixiang Food?

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.

Less than 5% of Suzhou Weizhixiang Food is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Suzhou Weizhixiang Food. With a 56% stake, CEO Jing Xia is the largest shareholder. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. The second and third largest shareholders are Jiulin Xia and Suzhou Jinhuasheng Management Consulting Enterprise (Limited Partnership), with an equal amount of shares to their name at 7.6%. Interestingly, the second-largest shareholder, Jiulin Xia is also Other Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 Suzhou Weizhixiang Food

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.

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 most recent data indicates that insiders own the majority of Suzhou Weizhixiang Food Co., Ltd.. This means they can collectively make decisions for the company. So they have a CN¥2.5b stake in this CN¥3.6b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 23% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Suzhou Weizhixiang Food. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 7.6%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Suzhou Weizhixiang Food better, we need to consider many other factors. Be aware that Suzhou Weizhixiang Food is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.