Fenbi Ltd.'s (HKG:2469) market cap dropped HK$490m last week; Retail investors bore the brunt

Key Insights

• Significant control over Fenbi by retail investors implies that the general public has more power to influence management and governance-related decisions
• A total of 10 investors have a majority stake in the company with 51% ownership
• Insiders have bought recently

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A look at the shareholders of Fenbi Ltd. (HKG:2469) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are retail investors with 44% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 6.7% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 30% stock also took a hit.

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

See our latest analysis for Fenbi

What Does The Institutional Ownership Tell Us About Fenbi?

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.

Fenbi 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 Fenbi's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Fenbi. The company's largest shareholder is Yong Li, with ownership of 12%. For context, the second largest shareholder holds about 9.6% of the shares outstanding, followed by an ownership of 7.3% by the third-largest shareholder. Xiaolong Zhang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 10 of the top shareholders account for roughly 51% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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

Insider Ownership Of Fenbi

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.

It seems insiders own a significant proportion of Fenbi Ltd.. It has a market capitalization of just HK$6.8b, and insiders have HK$2.1b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 44% stake in Fenbi. 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.

Public Company Ownership

Public companies currently own 12% of Fenbi stock. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

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. To that end, you should be aware of the 1 warning sign we've spotted with Fenbi .

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.