Retail investors among Yunnan Yunwei Company Limited's (SHSE:600725) largest shareholders, saw gain in holdings value after stock jumped 10% last week

Key Insights

• The considerable ownership by retail investors in Yunnan Yunwei indicates that they collectively have a greater say in management and business strategy
• The top 11 shareholders own 45% of the company
• Institutions own 11% of Yunnan Yunwei

To get a sense of who is truly in control of Yunnan Yunwei Company Limited (SHSE:600725), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 55% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, retail investors were the biggest beneficiaries of last week’s 10% gain.

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

See our latest analysis for Yunnan Yunwei

What Does The Institutional Ownership Tell Us About Yunnan Yunwei?

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.

Yunnan Yunwei already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Yunnan Yunwei'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 Yunnan Yunwei. Looking at our data, we can see that the largest shareholder is Yunnan Provincial Investment Holdings Group Co.,Ltd with 30% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.3% and 2.6% of the stock.

On studying our ownership data, we found that 11 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Yunnan Yunwei

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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

Shareholders would probably be interested to learn that insiders own shares in Yunnan Yunwei Company Limited. As individuals, the insiders collectively own CN¥142m worth of the CN¥3.7b company. This shows at least some alignment. 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 Yunnan Yunwei 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.

Private Company Ownership

We can see that Private Companies own 30%, of the shares on issue. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Yunnan Yunwei better, we need to consider many other factors. For example, we've discovered 2 warning signs for Yunnan Yunwei (1 makes us a bit uncomfortable!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.