Yinchuan Xinhua Commercial (Group) Co., Ltd.'s (SHSE:600785) largest shareholders are private companies who were rewarded as market cap surged CN¥203m last week

Key Insights

• Yinchuan Xinhua Commercial (Group)'s significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 50% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

If you want to know who really controls Yinchuan Xinhua Commercial (Group) Co., Ltd. (SHSE:600785), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 50% 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.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥203m last week.

In the chart below, we zoom in on the different ownership groups of Yinchuan Xinhua Commercial (Group).

See our latest analysis for Yinchuan Xinhua Commercial (Group)

What Does The Institutional Ownership Tell Us About Yinchuan Xinhua Commercial (Group)?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Yinchuan Xinhua Commercial (Group) does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Yinchuan Xinhua Commercial (Group)'s earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Yinchuan Xinhua Commercial (Group). Our data shows that Wumei Technology Group is the largest shareholder with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 4.9% and 3.0% of the stock.

On looking further, we found that 50% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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

Insider Ownership Of Yinchuan Xinhua Commercial (Group)

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.

We can report that insiders do own shares in Yinchuan Xinhua Commercial (Group) Co., Ltd.. In their own names, insiders own CN¥33m worth of stock in the CN¥2.2b company. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 40% stake in Yinchuan Xinhua Commercial (Group). This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

Our data indicates that Private Companies hold 50%, of the company's shares. 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:

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 Yinchuan Xinhua Commercial (Group) 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.