Wenzhou Yihua Connector Co., Ltd.'s (SZSE:002897) market cap surged CN¥592m last week, retail investors who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by retail investors in Wenzhou Yihua Connector indicates that they collectively have a greater say in management and business strategy
• The top 11 shareholders own 50% of the company
• Institutions own 12% of Wenzhou Yihua Connector

A look at the shareholders of Wenzhou Yihua Connector Co., Ltd. (SZSE:002897) can tell us which group is most powerful. We can see that retail investors own the lion's share in the company with 45% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, retail investors benefitted the most after the company's market cap rose by CN¥592m last week.

Let's delve deeper into each type of owner of Wenzhou Yihua Connector, beginning with the chart below.

View our latest analysis for Wenzhou Yihua Connector

What Does The Institutional Ownership Tell Us About Wenzhou Yihua Connector?

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.

Wenzhou Yihua Connector already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Wenzhou Yihua Connector's earnings history below. Of course, the future is what really matters.

Wenzhou Yihua Connector is not owned by hedge funds. Yihua Holding Group Co., Ltd. is currently the largest shareholder, with 38% of shares outstanding. In comparison, the second and third largest shareholders hold about 2.4% and 1.9% of the stock. Furthermore, CEO Youan Jiang is the owner of 1.4% of the company's shares.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 11 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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

Insider Ownership Of Wenzhou Yihua Connector

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

We can see that insiders own shares in Wenzhou Yihua Connector Co., Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥436m 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 45% stake in Wenzhou Yihua Connector. 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

It seems that Private Companies own 38%, of the Wenzhou Yihua Connector stock. 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.

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. For example, we've discovered 1 warning sign for Wenzhou Yihua Connector that you should be aware of before investing here.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.