Insiders are the top stockholders in Proya Cosmetics Co.,Ltd. (SHSE:603605), and the recent 4.7% drop might have disappointed them

Key Insights

• Proya CosmeticsLtd's significant insider ownership suggests inherent interests in company's expansion
• 52% of the business is held by the top 3 shareholders
• 26% of Proya CosmeticsLtd is held by Institutions

To get a sense of who is truly in control of Proya Cosmetics Co.,Ltd. (SHSE:603605), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 50% 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 as a group endured the highest losses after market cap fell by CN¥1.6b.

Let's delve deeper into each type of owner of Proya CosmeticsLtd, beginning with the chart below.

See our latest analysis for Proya CosmeticsLtd

What Does The Institutional Ownership Tell Us About Proya CosmeticsLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Proya CosmeticsLtd. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Proya CosmeticsLtd's earnings history below. Of course, the future is what really matters.

Proya CosmeticsLtd is not owned by hedge funds. Our data shows that Jun Cheng Hou is the largest shareholder with 35% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 15% and 2.0%, of the shares outstanding, respectively.

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.

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. 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 Proya CosmeticsLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Proya Cosmetics Co.,Ltd. stock. This gives them a lot of power. Insiders own CN¥16b worth of shares in the CN¥32b company. That's extraordinary! Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 24% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Proya CosmeticsLtd better, we need to consider many other factors. For instance, we've identified 1 warning sign for Proya CosmeticsLtd that you should be aware of.

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.