Winall Hi-tech Seed Co., Ltd.'s (SZSE:300087) market cap surged CN¥966m last week, individual investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by individual investors in Winall Hi-tech Seed 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 47% ownership
• 14% of Winall Hi-tech Seed is held by insiders

To get a sense of who is truly in control of Winall Hi-tech Seed Co., Ltd. (SZSE:300087), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, individual investors benefitted the most after the company's market cap rose by CN¥966m last week.

In the chart below, we zoom in on the different ownership groups of Winall Hi-tech Seed.

View our latest analysis for Winall Hi-tech Seed

What Does The Institutional Ownership Tell Us About Winall Hi-tech Seed?

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.

We can see that Winall Hi-tech Seed does have institutional investors; and they hold a good portion of the company's stock. 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 Winall Hi-tech Seed, (below). Of course, keep in mind that there are other factors to consider, too.

Winall Hi-tech Seed is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Sinochem Holdings Corporation Ltd. with 21% of shares outstanding. With 6.9% and 4.8% of the shares outstanding respectively, Guilan Jia and Qin Zhang are the second and third largest shareholders. Qin Zhang, who is the third-largest shareholder, also happens to hold the title of Vice Chairman.

On studying our ownership data, we found that 25 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Winall Hi-tech Seed

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.

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 most recent data indicates that insiders own a reasonable proportion of Winall Hi-tech Seed Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.6b stake in this CN¥11b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 53% of Winall Hi-tech Seed shares. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 21%, of the Winall Hi-tech Seed stock. 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 Winall Hi-tech Seed better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 4 warning signs with Winall Hi-tech Seed (at least 2 which make us uncomfortable) , and understanding them should be part of your investment process.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.