Guangxi LiuYao Group Co., Ltd (SHSE:603368) surges 6.1%; retail investors who own 55% shares profited along with insiders

Key Insights

• Significant control over Guangxi LiuYao Group by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 25 shareholders own 43% of the company
• 27% of Guangxi LiuYao Group is held by insiders

To get a sense of who is truly in control of Guangxi LiuYao Group Co., Ltd (SHSE:603368), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 55% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

While retail investors were the group that benefitted the most from last week’s CN¥359m market cap gain, insiders too had a 27% share in those profits.

Let's delve deeper into each type of owner of Guangxi LiuYao Group, beginning with the chart below.

See our latest analysis for Guangxi LiuYao Group

What Does The Institutional Ownership Tell Us About Guangxi LiuYao Group?

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 Guangxi LiuYao Group. 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 Guangxi LiuYao Group, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Guangxi LiuYao Group. The company's CEO Chaoyang Zhu is the largest shareholder with 25% of shares outstanding. National Council for Social Security Fund is the second largest shareholder owning 4.4% of common stock, and Guangdong Hengjian International Investment Co., Ltd. holds about 2.6% of the company stock.

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.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Guangxi LiuYao Group

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

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.

It seems insiders own a significant proportion of Guangxi LiuYao Group Co., Ltd. Insiders have a CN¥1.7b stake in this CN¥6.3b business. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, mostly comprising of individual investors, collectively holds 55% of Guangxi LiuYao Group shares. This level of ownership gives investors from the wider public some power to sway key policy decisions such as board composition, executive compensation, and the dividend payout ratio.

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. Case in point: We've spotted 2 warning signs for Guangxi LiuYao Group you should be aware of.

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.