Great week for Ziyuanyuan Holdings Group Limited (HKG:8223) insiders who have 73% stake and they haven’t stopped buying

Key Insights

• Significant insider control over Ziyuanyuan Holdings Group implies vested interests in company growth
• The largest shareholder of the company is Junshen Zhang with a 51% stake
• Recent purchases by insiders

A look at the shareholders of Ziyuanyuan Holdings Group Limited (HKG:8223) can tell us which group is most powerful. The group holding the most number of shares in the company, around 73% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

A quick look at our data suggests that insiders have been buying shares in the company recently and their bets paid off last week after the stock gained 67%.

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

Check out our latest analysis for Ziyuanyuan Holdings Group

What Does The Lack Of Institutional Ownership Tell Us About Ziyuanyuan Holdings Group?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are multiple explanations for why institutions don't own a stock. The most common is that the company is too small relative to funds under management, so the institution does not bother to look closely at the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Ziyuanyuan Holdings Group, for yourself, below.

Ziyuanyuan Holdings Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Junshen Zhang with 51% of shares outstanding. This implies that they possess majority interests and have significant control over the company. Investors usually consider it a good sign when the company leadership has such a significant stake, as this is widely perceived to increase the chance that the management will act in the best interests of the company. For context, the second largest shareholder holds about 19% of the shares outstanding, followed by an ownership of 3.5% by the third-largest shareholder. Interestingly, the third-largest shareholder, Zhiwei Tian is also a Member of the Board of Directors, again, indicating strong insider ownership amongst the company's top shareholders.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Ziyuanyuan Holdings Group

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.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our information suggests that insiders own more than half of Ziyuanyuan Holdings Group Limited. This gives them effective control of the company. So they have a HK$662m stake in this HK$903m business. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 27% stake in Ziyuanyuan Holdings Group. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

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. For example, we've discovered 4 warning signs for Ziyuanyuan Holdings Group (2 are concerning!) that you should be aware of before investing here.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com