Fujian Yongan Forestry(Group)Joint-Stock Co.,Ltd.'s (SZSE:000663) market cap dropped CN¥316m last week; Retail investors bore the brunt

Key Insights

• The considerable ownership by retail investors in Fujian Yongan Forestry(Group)Ltd indicates that they collectively have a greater say in management and business strategy
• 42% of the business is held by the top 22 shareholders
• 10% of Fujian Yongan Forestry(Group)Ltd is held by Institutions

Every investor in Fujian Yongan Forestry(Group)Joint-Stock Co.,Ltd. (SZSE:000663) should be aware of the most powerful shareholder groups. With 58% stake, retail 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 last week, retail investors endured the biggest losses as the stock fell by 14%.

In the chart below, we zoom in on the different ownership groups of Fujian Yongan Forestry(Group)Ltd.

View our latest analysis for Fujian Yongan Forestry(Group)Ltd

What Does The Institutional Ownership Tell Us About Fujian Yongan Forestry(Group)Ltd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Fujian Yongan Forestry(Group)Ltd does have institutional investors; and they hold a good portion of the company's stock. 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 Fujian Yongan Forestry(Group)Ltd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Fujian Yongan Forestry(Group)Ltd. China Forestry Group Corporation is currently the company's largest shareholder with 19% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 6.4% and 4.0%, of the shares outstanding, respectively.

On studying our ownership data, we found that 22 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 Fujian Yongan Forestry(Group)Ltd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 most recent data indicates that insiders own some shares in Fujian Yongan Forestry(Group)Joint-Stock Co.,Ltd.. In their own names, insiders own CN¥47m worth of stock in the CN¥1.9b 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 -- including retail investors -- own 58% of Fujian Yongan Forestry(Group)Ltd. 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 29%, 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 Fujian Yongan Forestry(Group)Ltd better, we need to consider many other factors. Be aware that Fujian Yongan Forestry(Group)Ltd is showing 2 warning signs in our investment analysis , you should know about...

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this 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.