Maoye Commercial Co., Ltd.'s (SHSE:600828) last week's 8.9% decline must have disappointed public companies who have a significant stake

Key Insights

• Significant control over Maoye Commercial by public companies implies that the general public has more power to influence management and governance-related decisions
• 83% of the company is held by a single shareholder (Maoye International Holdings Limited)
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

A look at the shareholders of Maoye Commercial Co., Ltd. (SHSE:600828) can tell us which group is most powerful. The group holding the most number of shares in the company, around 83% to be precise, is public companies. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to CN¥4.6b last week, public companies would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Maoye Commercial, beginning with the chart below.

See our latest analysis for Maoye Commercial

What Does The Institutional Ownership Tell Us About Maoye Commercial?

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.

As you can see, institutional investors have a fair amount of stake in Maoye Commercial. 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. 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 Maoye Commercial's historic earnings and revenue below, but keep in mind there's always more to the story.

Maoye Commercial is not owned by hedge funds. Maoye International Holdings Limited is currently the largest shareholder, with 83% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. Shenzhen Demao Investment Enterprise (Limited Partnership) is the second largest shareholder owning 2.6% of common stock, and Hong Kong Exchanges & Clearing Limited, Asset Management Arm holds about 1.3% of the company stock.

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 Maoye Commercial

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.

Our data suggests that insiders own under 1% of Maoye Commercial Co., Ltd. in their own names. It has a market capitalization of just CN¥4.6b, and the board has only CN¥15m worth of shares in their own names. We generally like to see a board more invested. However it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in Maoye Commercial. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Public Company Ownership

Public companies currently own 83% of Maoye Commercial stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Maoye Commercial has 5 warning signs (and 2 which are a bit unpleasant) we think 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.