Shouyao Holdings (Beijing) Co., LTD.'s (SHSE:688197) CEO Wenjun Li is the most upbeat insider, and their holdings increased by 5.7% last week

Key Insights

• Insiders appear to have a vested interest in Shouyao Holdings (Beijing)'s growth, as seen by their sizeable ownership
• The largest shareholder of the company is Wenjun Li with a 52% stake
• 15% of Shouyao Holdings (Beijing) is held by Institutions

If you want to know who really controls Shouyao Holdings (Beijing) Co., LTD. (SHSE:688197), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are individual insiders with 52% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit CN¥7.0b market cap following a 5.7% gain in the stock.

Let's take a closer look to see what the different types of shareholders can tell us about Shouyao Holdings (Beijing).

See our latest analysis for Shouyao Holdings (Beijing)

What Does The Institutional Ownership Tell Us About Shouyao Holdings (Beijing)?

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.

We can see that Shouyao Holdings (Beijing) 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. 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 Shouyao Holdings (Beijing)'s earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shouyao Holdings (Beijing). The company's CEO Wenjun Li is the largest shareholder with 52% of shares outstanding. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With 6.5% and 4.4% of the shares outstanding respectively, Beijing E-Town International Investment & Development Co.,Ltd. and Penghua Fund Management Co., Ltd. are the second and third largest shareholders.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Shouyao Holdings (Beijing)

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Shouyao Holdings (Beijing) Co., LTD. stock. This gives them a lot of power. Given it has a market cap of CN¥7.0b, that means they have CN¥3.7b worth of shares. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 15% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Shouyao Holdings (Beijing). While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Equity Ownership

Private equity firms hold a 6.5% stake in Shouyao Holdings (Beijing). This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 6.7%, 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.

Public Company Ownership

We can see that public companies hold 4.3% of the Shouyao Holdings (Beijing) shares on issue. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

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. To that end, you should learn about the 2 warning signs we've spotted with Shouyao Holdings (Beijing) (including 1 which doesn't sit too well with us) .

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.

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

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