Yechiu Metal Recycling (China) Ltd.'s (SHSE:601388) stock price dropped 8.7% last week; individual investors would not be happy

Key Insights

• Significant control over Yechiu Metal Recycling (China) by individual investors implies that the general public has more power to influence management and governance-related decisions
• A total of 5 investors have a majority stake in the company with 51% ownership
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

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To get a sense of who is truly in control of Yechiu Metal Recycling (China) Ltd. (SHSE:601388), it is important to understand the ownership structure of the business. With 46% stake, individual investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 8.7% decline in share price, individual investors suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Yechiu Metal Recycling (China).

See our latest analysis for Yechiu Metal Recycling (China)

What Does The Institutional Ownership Tell Us About Yechiu Metal Recycling (China)?

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.

Since institutions own only a small portion of Yechiu Metal Recycling (China), many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Yechiu Metal Recycling (China). Our data shows that Yechiu (Hong Kong) Co., Ltd. is the largest shareholder with 36% of shares outstanding. Sheng Chih Lin is the second largest shareholder owning 8.0% of common stock, and Zhilian Investment Holding Co., Ltd. holds about 4.5% of the company stock.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 5 shareholders suggesting that these owners wield significant influence on the business.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Yechiu Metal Recycling (China)

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

We can report that insiders do own shares in Yechiu Metal Recycling (China) Ltd.. In their own names, insiders own CN¥520m worth of stock in the CN¥5.3b 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

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yechiu Metal Recycling (China). While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 42%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for Yechiu Metal Recycling (China) 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.