Haoxiangni Health Food Co.,Ltd.'s (SZSE:002582) market cap up CN¥214m last week, benefiting both retail investors who own 49% as well as insiders

Key Insights

• The considerable ownership by retail investors in Haoxiangni Health FoodLtd indicates that they collectively have a greater say in management and business strategy
• A total of 25 investors have a majority stake in the company with 50% ownership
• Insider ownership in Haoxiangni Health FoodLtd is 34%

If you want to know who really controls Haoxiangni Health Food Co.,Ltd. (SZSE:002582), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Retail investors gained the most after market cap touched CN¥2.2b last week, while insiders who own 34% also benefitted.

In the chart below, we zoom in on the different ownership groups of Haoxiangni Health FoodLtd.

Check out our latest analysis for Haoxiangni Health FoodLtd

What Does The Institutional Ownership Tell Us About Haoxiangni Health FoodLtd?

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 Haoxiangni Health FoodLtd. 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. 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 Haoxiangni Health FoodLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Haoxiangni Health FoodLtd. With a 30% stake, CEO Jubin Shi is the largest shareholder. With 3.4% and 2.1% of the shares outstanding respectively, Hangzhou Haocheng Industrial Co., Ltd. and Sichuan Development Securities Investment Fund Management Co., Ltd. are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 25 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Haoxiangni Health FoodLtd

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.

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 information suggests that insiders maintain a significant holding in Haoxiangni Health Food Co.,Ltd.. Insiders have a CN¥743m stake in this CN¥2.2b business. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 49% stake in Haoxiangni Health FoodLtd. 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 3.4%, 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 Haoxiangni Health FoodLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 2 warning signs with Haoxiangni Health FoodLtd , and understanding them should be part of your investment process.

Of course this may not be the best stock to buy. So take a peek at this free 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.