Private equity firms among Xiamen Yan Palace Bird's Nest Industry Co., Ltd.'s (HKG:1497) largest stockholders and were hit after last week's 9.9% price drop

Key Insights

• Xiamen Yan Palace Bird's Nest Industry's significant private equity firms ownership suggests that the key decisions are influenced by shareholders from the larger public
• 51% of the business is held by the top 4 shareholders
• Insider ownership in Xiamen Yan Palace Bird's Nest Industry is 27%

Every investor in Xiamen Yan Palace Bird's Nest Industry Co., Ltd. (HKG:1497) should be aware of the most powerful shareholder groups. We can see that private equity firms own the lion's share in the company with 30% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders who own 27% came under pressure after market cap dropped to HK$3.7b last week,private equity firms took the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Xiamen Yan Palace Bird's Nest Industry.

See our latest analysis for Xiamen Yan Palace Bird's Nest Industry

What Does The Institutional Ownership Tell Us About Xiamen Yan Palace Bird's Nest Industry?

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.

Less than 5% of Xiamen Yan Palace Bird's Nest Industry is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. So if the company itself can improve over time, we may well see more institutional buyers in the future. It is not uncommon to see a big share price rise if multiple institutional investors are trying to buy into a stock at the same time. So check out the historic earnings trajectory, below, but keep in mind it's the future that counts most.

Hedge funds don't have many shares in Xiamen Yan Palace Bird's Nest Industry. Xiamen Shuangdanma Industrial Development Co., Ltd. is currently the largest shareholder, with 20% of shares outstanding. For context, the second largest shareholder holds about 13% of the shares outstanding, followed by an ownership of 9.0% by the third-largest shareholder. Wenbin Zheng, who is the third-largest shareholder, also happens to hold the title of Vice Chairman. In addition, we found that Youquan Li, the CEO has 7.1% of the shares allocated to their name.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Xiamen Yan Palace Bird's Nest Industry

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

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.

It seems insiders own a significant proportion of Xiamen Yan Palace Bird's Nest Industry Co., Ltd.. Insiders have a HK$993m stake in this HK$3.7b business. 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-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. 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.

Private Equity Ownership

With an ownership of 30%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Private Company Ownership

We can see that Private Companies own 20%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xiamen Yan Palace Bird's Nest Industry better, we need to consider many other factors. Take risks for example - Xiamen Yan Palace Bird's Nest Industry has 1 warning sign we think you should be aware of.

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.