While institutions invested in China Merchants Property Operation & Service Co., Ltd. (SZSE:001914) benefited from last week's 4.7% gain, private companies stood to gain the most

Key Insights

• Significant control over China Merchants Property Operation & Service by private companies implies that the general public has more power to influence management and governance-related decisions
• 59% of the business is held by the top 2 shareholders
• Institutions own 20% of China Merchants Property Operation & Service

Every investor in China Merchants Property Operation & Service Co., Ltd. (SZSE:001914) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 59% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While private companies were the group that reaped the most benefits after last week’s 4.7% price gain, institutions also received a 20% cut.

Let's take a closer look to see what the different types of shareholders can tell us about China Merchants Property Operation & Service.

View our latest analysis for China Merchants Property Operation & Service

What Does The Institutional Ownership Tell Us About China Merchants Property Operation & Service?

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 China Merchants Property Operation & Service does have institutional investors; and they hold a good portion of the company's stock. 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 China Merchants Property Operation & Service's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in China Merchants Property Operation & Service. Our data shows that China Merchants Group Limited is the largest shareholder with 47% of shares outstanding. Aviation Industry Corporation of China,Ltd. is the second largest shareholder owning 11% of common stock, and Zhong Ou Fund Management Co., Ltd holds about 7.5% of the company stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China Merchants Property Operation & Service

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

Our data suggests that insiders own under 1% of China Merchants Property Operation & Service Co., Ltd. in their own names. But they may have an indirect interest through a corporate structure that we haven't picked up on. It is a pretty big company, so it would be possible for board members to own a meaningful interest in the company, without owning much of a proportional interest. In this case, they own around CN¥56k worth of shares (at current prices). Arguably, recent buying and selling is just as important to consider. You can click here to see if insiders have been buying or selling.

General Public Ownership

With a 19% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China Merchants Property Operation & Service. 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 Company Ownership

We can see that Private Companies own 59%, 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.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for China Merchants Property Operation & Service you should be aware of.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.