Zhejiang Yiming Food Co., Ltd.'s (SHSE:605179) market cap rose CN¥642m last week; private companies who hold 46% profited and so did insiders

Key Insights

• Zhejiang Yiming Food's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• 67% of the business is held by the top 2 shareholders
• 39% of Zhejiang Yiming Food is held by insiders

If you want to know who really controls Zhejiang Yiming Food Co., Ltd. (SHSE:605179), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 8.8% increase in the stock price last week, private companies profited the most, but insiders who own 39% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Zhejiang Yiming Food, beginning with the chart below.

Check out our latest analysis for Zhejiang Yiming Food

What Does The Lack Of Institutional Ownership Tell Us About Zhejiang Yiming Food?

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. Alternatively, there might be something about the company that has kept institutional investors away. Zhejiang Yiming Food might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Zhejiang Yiming Food is not owned by hedge funds. Our data shows that Zhejiang Mingchun Investment Co., Ltd. is the largest shareholder with 40% of shares outstanding. Like Zhu is the second largest shareholder owning 27% of common stock, and Liqun Zhu holds about 7.9% of the company stock. Interestingly, the bottom two of the top three shareholders also hold the title of Chief Executive Officer and Member of the Board of Directors, respectively, suggesting that these insiders have a personal stake in the company.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 67% stake.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zhejiang Yiming Food

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 a reasonable proportion of Zhejiang Yiming Food Co., Ltd.. It has a market capitalization of just CN¥8.0b, and insiders have CN¥3.1b worth of shares in their own names. That's quite significant. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 14% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 46%, of the shares on issue. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. For example, we've discovered 2 warning signs for Zhejiang Yiming Food that you should be aware of before investing here.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.