Owning 40% in MeiHua Holdings Group Co.,Ltd (SHSE:600873) means that insiders are heavily invested in the company's future

Key Insights

• Significant insider control over MeiHua Holdings GroupLtd implies vested interests in company growth
• The top 9 shareholders own 50% of the company
• 20% of MeiHua Holdings GroupLtd is held by Institutions

Every investor in MeiHua Holdings Group Co.,Ltd (SHSE:600873) should be aware of the most powerful shareholder groups. With 40% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

So it follows, every decision made by insiders of MeiHua Holdings GroupLtd regarding the company's future would be crucial to them.

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

Check out our latest analysis for MeiHua Holdings GroupLtd

What Does The Institutional Ownership Tell Us About MeiHua Holdings GroupLtd?

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 MeiHua Holdings GroupLtd. 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. 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 MeiHua Holdings GroupLtd's earnings history below. Of course, the future is what really matters.

MeiHua Holdings GroupLtd is not owned by hedge funds. Our data shows that Qingshan Meng is the largest shareholder with 30% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 4.0% and 3.5%, of the shares outstanding, respectively. Additionally, the company's CEO Jun He directly holds 0.9% of the total shares outstanding.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of MeiHua Holdings GroupLtd

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.

Our most recent data indicates that insiders own a reasonable proportion of MeiHua Holdings Group Co.,Ltd. Insiders own CN¥12b worth of shares in the CN¥29b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 39% ownership, the general public, mostly comprising of individual investors, have some degree of sway over MeiHua Holdings GroupLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand MeiHua Holdings GroupLtd better, we need to consider many other factors. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for MeiHua Holdings GroupLtd you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com