Chongqing Hongjiu Fruit Co., Limited's (HKG:6689) last week's 14% decline must have disappointed individual investors who have a significant stake

Key Insights

• The considerable ownership by individual investors in Chongqing Hongjiu Fruit indicates that they collectively have a greater say in management and business strategy
• 53% of the business is held by the top 5 shareholders
• Insiders own 37% of Chongqing Hongjiu Fruit

A look at the shareholders of Chongqing Hongjiu Fruit Co., Limited (HKG:6689) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual investors with 39% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of individual investors took a hit after last week’s 14% price drop, insiders with their 37% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Chongqing Hongjiu Fruit.

Check out our latest analysis for Chongqing Hongjiu Fruit

What Does The Institutional Ownership Tell Us About Chongqing Hongjiu Fruit?

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it's included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

Institutions have a very small stake in Chongqing Hongjiu Fruit. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. So if the company itself can improve over time, we may well see more institutional buyers in the future. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hedge funds don't have many shares in Chongqing Hongjiu Fruit. Our data suggests that Hongjiu Deng, who is also the company's Top Key Executive, holds the most number of shares at 29%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 8.0% and 6.8%, of the shares outstanding, respectively. Interestingly, the second-largest shareholder, Zongying Jiang 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 5 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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 a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Chongqing Hongjiu Fruit

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

Our most recent data indicates that insiders own a reasonable proportion of Chongqing Hongjiu Fruit Co., Limited. Insiders own HK$1.8b worth of shares in the HK$4.8b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 39% stake in Chongqing Hongjiu Fruit. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With an ownership of 5.6%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

It seems that Private Companies own 7.9%, of the Chongqing Hongjiu Fruit stock. 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.

Public Company Ownership

It appears to us that public companies own 6.8% of Chongqing Hongjiu Fruit. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Chongqing Hongjiu Fruit (1 is concerning!) that you should be aware of before investing here.

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.