Proya Cosmetics Co.,Ltd. (SHSE:603605) adds CN¥2.3b in market cap and insiders have a 51% stake in that gain

Key Insights

• Insiders appear to have a vested interest in Proya CosmeticsLtd's growth, as seen by their sizeable ownership
• The top 3 shareholders own 52% of the company
• Institutional ownership in Proya CosmeticsLtd is 25%

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. With 51% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, insiders benefitted the most after the company's market cap rose by CN¥2.3b last week.

Let's take a closer look to see what the different types of shareholders can tell us about Proya CosmeticsLtd.

View our latest analysis for Proya CosmeticsLtd

What Does The Institutional Ownership Tell Us About Proya CosmeticsLtd?

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 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.

Hedge funds don't have many shares in Proya CosmeticsLtd. Jun Cheng Hou is currently the largest shareholder, with 35% of shares outstanding. For context, the second largest shareholder holds about 15% of the shares outstanding, followed by an ownership of 2.0% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 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. 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 own more than half of Proya Cosmetics Co.,Ltd.. This gives them effective control of the company. That means insiders have a very meaningful CN¥23b stake in this CN¥46b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 25% 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:

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 Proya CosmeticsLtd .

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.