Private companies in Liqun Commercial Group Co.,Ltd. (SHSE:601366) are its biggest bettors, and their bets paid off as stock gained 11% last week

Key Insights

• Significant control over Liqun Commercial GroupLtd by private companies implies that the general public has more power to influence management and governance-related decisions
• 51% of the business is held by the top 4 shareholders
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Liqun Commercial Group Co.,Ltd. (SHSE:601366), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 56% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥425m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Liqun Commercial GroupLtd.

Check out our latest analysis for Liqun Commercial GroupLtd

What Does The Institutional Ownership Tell Us About Liqun Commercial GroupLtd?

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.

Institutions have a very small stake in Liqun Commercial GroupLtd. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Liqun Commercial GroupLtd. Looking at our data, we can see that the largest shareholder is Liqun Group Co., Ltd. with 27% of shares outstanding. With 14% and 5.0% of the shares outstanding respectively, Qingdao Juntai Industrial Development Co., Ltd. and Qingdao Hengrongtai Asset Management Co., Ltd. are the second and third largest shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Liqun Commercial GroupLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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 Liqun Commercial Group Co.,Ltd.. In their own names, insiders own CN¥239m worth of stock in the CN¥4.3b company. Some would say this shows alignment of interests between shareholders and the board. But it might be worth checking if those insiders have been selling.

General Public Ownership

With a 37% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Liqun Commercial GroupLtd. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 56%, of the Liqun Commercial GroupLtd stock. 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. For example, we've discovered 3 warning signs for Liqun Commercial GroupLtd (2 are significant!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. So take a peek at this free 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.

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