Shanghai Xujiahui Commercial Co., Ltd.'s (SZSE:002561) biggest owners are retail investors who got richer after stock soared 10% last week

Key Insights

• The considerable ownership by retail investors in Shanghai Xujiahui Commercial indicates that they collectively have a greater say in management and business strategy
• 49% of the business is held by the top 16 shareholders
• 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 Shanghai Xujiahui Commercial Co., Ltd. (SZSE:002561), then you'll have to look at the makeup of its share registry. We can see that retail investors own the lion's share in the company with 51% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥308m last week.

In the chart below, we zoom in on the different ownership groups of Shanghai Xujiahui Commercial.

See our latest analysis for Shanghai Xujiahui Commercial

What Does The Lack Of Institutional Ownership Tell Us About Shanghai Xujiahui Commercial?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Shanghai Xujiahui Commercial might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

Shanghai Xujiahui Commercial is not owned by hedge funds. Shanghai Xujiahui Shopping Center (Group) Co., Ltd. is currently the company's largest shareholder with 30% of shares outstanding. Shanghai ShangTou Industrial Investment Holding Co., Ltd. is the second largest shareholder owning 6.0% of common stock, and Shanghai Huixin Investment Co., Ltd. holds about 3.2% of the company stock.

Our studies suggest that the top 16 shareholders collectively control less than half of the company's shares, meaning that the company's shares are widely disseminated and there is no dominant shareholder.

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 Shanghai Xujiahui Commercial

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 Shanghai Xujiahui Commercial Co., Ltd.. As individuals, the insiders collectively own CN¥284m worth of the CN¥3.2b 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

The general public -- including retail investors -- own 51% of Shanghai Xujiahui Commercial. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Private Company Ownership

Our data indicates that Private Companies hold 40%, of the company's shares. 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:

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. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Shanghai Xujiahui Commercial (of which 1 makes us a bit uncomfortable!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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