With 64% ownership, Yadea Group Holdings Ltd. (HKG:1585) insiders have a lot riding on the company's future

Key Insights

• Significant insider control over Yadea Group Holdings implies vested interests in company growth
• The top 2 shareholders own 64% of the company
• Institutional ownership in Yadea Group Holdings is 18%

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To get a sense of who is truly in control of Yadea Group Holdings Ltd. (HKG:1585), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 64% to be precise, is individual insiders. Put another way, the group faces the maximum upside potential (or downside risk).

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

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

Check out 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.

We can see that Yadea Group Holdings does have institutional investors; and they hold a good portion of the company's stock. 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.

Hedge funds don't have many shares 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 48% of shares outstanding. In comparison, the second and third largest shareholders hold about 17% and 1.9% of the stock. 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.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Yadea Group Holdings

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.

It seems that insiders own more than half the Yadea Group Holdings Ltd. stock. This gives them a lot of power. Given it has a market cap of HK$40b, that means insiders have a whopping HK$26b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

With a 18% ownership, the general public, mostly comprising of individual investors, have some degree of sway over 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 instance, we've identified 1 warning sign for Yadea Group Holdings that you should be aware of.

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.