Easyhome New Retail Group Corporation Limited (SZSE:000785) surges 11%; private companies who own 51% shares profited along with institutions

Key Insights

• Significant control over Easyhome New Retail Group by private companies implies that the general public has more power to influence management and governance-related decisions
• 57% of the business is held by the top 4 shareholders
• Institutional ownership in Easyhome New Retail Group is 18%

To get a sense of who is truly in control of Easyhome New Retail Group Corporation Limited (SZSE:000785), it is important to understand the ownership structure of the business. With 51% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While private companies were the group that reaped the most benefits after last week’s 11% price gain, institutions also received a 18% cut.

Let's delve deeper into each type of owner of Easyhome New Retail Group, beginning with the chart below.

Check out our latest analysis for Easyhome New Retail Group

What Does The Institutional Ownership Tell Us About Easyhome New Retail Group?

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.

Easyhome New Retail Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Easyhome New Retail Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Easyhome New Retail Group. Beijing Zhongtian Jiye Investment Management Co., Ltd. is currently the largest shareholder, with 26% of shares outstanding. Khorgos Huixinda Building Materials Co., Ltd. is the second largest shareholder owning 11% of common stock, and BBMG Corporation holds about 10% of the company stock. In addition, we found that Linpeng Wang, the CEO has 5.9% of the shares allocated to their name.

On looking further, we found that 57% 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 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. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Easyhome New Retail Group

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.

We can report that insiders do own shares in Easyhome New Retail Group Corporation Limited. This is a big company, so it is good to see this level of alignment. Insiders own CN¥960m worth of shares (at current prices). Most would say this shows alignment of interests between shareholders and the board. Still, it might be worth checking if those insiders have been selling.

General Public Ownership

The general public, who are usually individual investors, hold a 14% stake in Easyhome New Retail Group. 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 51%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Public Company Ownership

Public companies currently own 10% of Easyhome New Retail Group stock. 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. Case in point: We've spotted 2 warning signs for Easyhome New Retail Group you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter future.

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