What Is The Ownership Structure Like For Ziyuanyuan Holdings Group Limited (HKG:8223)?

By
Simply Wall St
Published
January 08, 2022
SEHK:8223
Source: Shutterstock

Every investor in Ziyuanyuan Holdings Group Limited (HKG:8223) should be aware of the most powerful shareholder groups. Institutions often own shares in more established companies, while it's not unusual to see insiders own a fair bit of smaller companies. I generally like to see some degree of insider ownership, even if only a little. As Nassim Nicholas Taleb said, 'Don’t tell me what you think, tell me what you have in your portfolio.

With a market capitalization of HK$888m, Ziyuanyuan Holdings Group is a small cap stock, so it might not be well known by many institutional investors. Our analysis of the ownership of the company, below, shows that institutions don't own shares in the company. 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

ownership-breakdown
SEHK:8223 Ownership Breakdown January 8th 2022

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

We don't tend to see institutional investors holding stock of companies that are very risky, thinly traded, or very small. Though we do sometimes see large companies without institutions on the register, it's not particularly common.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. 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.

earnings-and-revenue-growth
SEHK:8223 Earnings and Revenue Growth January 8th 2022

Ziyuanyuan Holdings Group is not owned by hedge funds. With a 55% stake, CEO Junshen Zhang is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. With an ownership of 20%, the second largest shareholder is Junwei Zhang

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. 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. 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.

It seems that insiders own more than half the Ziyuanyuan Holdings Group Limited stock. This gives them a lot of power. That means they own HK$666m worth of shares in the HK$888m company. That's quite meaningful. 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

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Ziyuanyuan Holdings Group. 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 Ziyuanyuan Holdings Group better, we need to consider many other factors. Case in point: We've spotted 1 warning sign for Ziyuanyuan Holdings Group you should be aware of.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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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