With a 84% stake, Nongfu Spring Co., Ltd. (HKG:9633) insiders have a lot riding on the company

Key Insights

• Nongfu Spring's significant insider ownership suggests inherent interests in company's expansion
• Shanshan Zhong owns 84% of the company
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

Every investor in Nongfu Spring Co., Ltd. (HKG:9633) should be aware of the most powerful shareholder groups. We can see that individual insiders own the lion's share in the company with 84% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

So it follows, every decision made by insiders of Nongfu Spring regarding the company's future would be crucial to them.

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

View our latest analysis for Nongfu Spring

What Does The Institutional Ownership Tell Us About Nongfu Spring?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Institutions have a very small stake in Nongfu Spring. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

We note that hedge funds don't have a meaningful investment in Nongfu Spring. Looking at our data, we can see that the largest shareholder is the CEO Shanshan Zhong with 84% 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. The second and third largest shareholders are The Vanguard Group, Inc. and BlackRock, Inc., with an equal amount of shares to their name at 0.6%.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Nongfu Spring

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. 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.

Our most recent data indicates that insiders own the majority of Nongfu Spring Co., Ltd.. This means they can collectively make decisions for the company. That means insiders have a very meaningful HK$424b stake in this HK$503b business. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 13% 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Nongfu Spring better, we need to consider many other factors.

I always like to check for a history of revenue growth. You can too, by accessing this free chart of historic revenue and earnings in this detailed graph.

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.