Chengdu Bright Eye Hospital Group Co., Ltd. (SZSE:301239) adds CN¥567m in market cap and insiders have a 44% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Chengdu Bright Eye Hospital Group's growth, as seen by their sizeable ownership
• 50% of the business is held by the top 3 shareholders
• Institutional ownership in Chengdu Bright Eye Hospital Group is 26%

A look at the shareholders of Chengdu Bright Eye Hospital Group Co., Ltd. (SZSE:301239) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 44% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders were the biggest beneficiaries of last week’s 9.2% gain.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu Bright Eye Hospital Group.

See our latest analysis for Chengdu Bright Eye Hospital Group

What Does The Institutional Ownership Tell Us About Chengdu Bright Eye Hospital Group?

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.

Chengdu Bright Eye Hospital Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Chengdu Bright Eye Hospital Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Chengdu Bright Eye Hospital Group. Xuyang Xu is currently the largest shareholder, with 43% of shares outstanding. For context, the second largest shareholder holds about 4.0% of the shares outstanding, followed by an ownership of 3.1% by the third-largest shareholder.

After doing some more digging, we found that the top 3 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Chengdu Bright Eye Hospital Group

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 most recent data indicates that insiders own a reasonable proportion of Chengdu Bright Eye Hospital Group Co., Ltd.. Insiders own CN¥3.0b worth of shares in the CN¥6.7b company. 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-- including retail investors -- own 21% 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

It seems that Private Companies own 8.9%, of the Chengdu Bright Eye Hospital Group 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with Chengdu Bright Eye Hospital Group .

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.