China New Higher Education Group Limited's (HKG:2001) largest shareholder, Top Key Executive Xiaoxuan Li sees holdings value fall by 11% following recent drop

Key Insights

• China New Higher Education Group's significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Xiaoxuan Li with a 50% stake
• Institutions own 15% of China New Higher Education Group

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A look at the shareholders of China New Higher Education Group Limited (HKG:2001) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are individual insiders with 50% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by HK$276m.

Let's delve deeper into each type of owner of China New Higher Education Group, beginning with the chart below.

See our latest analysis for China New Higher Education Group

What Does The Institutional Ownership Tell Us About China New Higher Education Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that China New Higher Education Group does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 China New Higher Education Group's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in China New Higher Education Group. Our data suggests that Xiaoxuan Li, who is also the company's Top Key Executive, holds the most number of shares at 50%. 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. In comparison, the second and third largest shareholders hold about 6.0% and 5.0% of the stock.

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 China New Higher Education Group

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 China New Higher Education Group Limited. This means they can collectively make decisions for the company. Given it has a market cap of HK$2.2b, that means they have HK$1.1b worth of shares. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 35% ownership, the general public, mostly comprising of individual investors, have some degree of sway over China New Higher Education Group. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China New Higher Education Group better, we need to consider many other factors. Be aware that China New Higher Education Group is showing 2 warning signs in our investment analysis , you should know about...

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.