Recent 7.6% decline may not have gone down well with Yadea Group Holdings Ltd. (HKG:1585) insiders who've been purchasing recently

Key Insights

• Insiders appear to have a vested interest in Yadea Group Holdings' growth, as seen by their sizeable ownership
• A total of 2 investors have a majority stake in the company with 64% ownership
• Insiders have bought recently

Every investor in Yadea Group Holdings Ltd. (HKG:1585) should be aware of the most powerful shareholder groups. With 64% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Notably, insiders have bought shares recently. Their expectations, however, were not satisfied, as the market cap dropped to HK$35b over the past week.

Let's delve deeper into each type of owner of Yadea Group Holdings, beginning with the chart below.

See our latest analysis for Yadea Group Holdings

What Does The Institutional Ownership Tell Us About Yadea Group Holdings?

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.

Yadea Group Holdings 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. 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 Yadea Group Holdings' earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Yadea Group Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Yadea Group Holdings' case, its Top Key Executive, Jinggui Dong, is the largest shareholder, holding 47% of shares outstanding. For context, the second largest shareholder holds about 17% of the shares outstanding, followed by an ownership of 1.8% by the third-largest shareholder. Interestingly, the second-largest shareholder, Jinghong Qian is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Yadea Group Holdings

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 most recent data indicates that insiders own the majority of Yadea Group Holdings Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$22b stake in this HK$35b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 18% stake in Yadea Group Holdings. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Yadea Group Holdings better, we need to consider many other factors. For example, we've discovered 1 warning sign for Yadea Group Holdings that you should be aware of before investing here.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.