Mudanjiang Hengfeng Paper Co.,Ltd's (SHSE:600356) largest shareholders are retail investors who were rewarded as market cap surged CN¥278m last week

Key Insights

• Mudanjiang Hengfeng PaperLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 25 shareholders own 43% of the company
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Mudanjiang Hengfeng Paper Co.,Ltd (SHSE:600356) should be aware of the most powerful shareholder groups. And the group that holds the biggest piece of the pie are retail investors with 57% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥278m last week.

Let's delve deeper into each type of owner of Mudanjiang Hengfeng PaperLtd, beginning with the chart below.

Check out our latest analysis for Mudanjiang Hengfeng PaperLtd

What Does The Institutional Ownership Tell Us About Mudanjiang Hengfeng PaperLtd?

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 Mudanjiang Hengfeng PaperLtd. 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 Mudanjiang Hengfeng PaperLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Mudanjiang Hengfeng PaperLtd. Our data shows that Mudanjiang State-owned Assets Investment Company Limited is the largest shareholder with 30% of shares outstanding. With 3.1% and 2.7% of the shares outstanding respectively, Heilongjiang Investment Holdings Co., Ltd. and Mudanjiang Hengfeng Paper Co.,Ltd., ESOP are the second and third largest shareholders.

Our studies suggest that the top 25 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Mudanjiang Hengfeng PaperLtd

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can report that insiders do own shares in Mudanjiang Hengfeng Paper Co.,Ltd. As individuals, the insiders collectively own CN¥54m worth of the CN¥2.2b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

The general public -- including retail investors -- own 57% of Mudanjiang Hengfeng PaperLtd. 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.

Private Company Ownership

We can see that Private Companies own 30%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Mudanjiang Hengfeng PaperLtd better, we need to consider many other factors. Take risks for example - Mudanjiang Hengfeng PaperLtd has 2 warning signs we think you should be aware of.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.