Private companies invested in Shiyue Daotian Group Co., Ltd. (HKG:9676) copped the brunt of last week's HK$438m market cap decline

Key Insights

• The considerable ownership by private companies in Shiyue Daotian Group indicates that they collectively have a greater say in management and business strategy
• The top 2 shareholders own 57% of the company
• Recent sales by insiders

If you want to know who really controls Shiyue Daotian Group Co., Ltd. (HKG:9676), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are private companies with 46% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private companies took a hit after last week’s 5.5% price drop, insiders with their 23% also suffered.

Let's delve deeper into each type of owner of Shiyue Daotian Group, beginning with the chart below.

View our latest analysis for Shiyue Daotian Group

What Does The Institutional Ownership Tell Us About Shiyue Daotian Group?

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.

We can see that Shiyue Daotian Group does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Shiyue Daotian Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Shiyue Daotian Group. The company's largest shareholder is Shenyang Shiyue Daotian Enterprise Management Consulting Partnership (Limited Partnership), with ownership of 36%. Meanwhile, the second and third largest shareholders, hold 21% and 11%, of the shares outstanding, respectively. Bing Wang, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 57% stake.

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 Shiyue Daotian Group

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. 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 most recent data indicates that insiders own a reasonable proportion of Shiyue Daotian Group Co., Ltd.. Insiders own HK$1.7b worth of shares in the HK$7.5b company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 10% stake in Shiyue Daotian Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Equity Ownership

With a stake of 11%, private equity firms could influence the Shiyue Daotian Group board. Sometimes we see private equity stick around for the long term, but generally speaking they have a shorter investment horizon and -- as the name suggests -- don't invest in public companies much. After some time they may look to sell and redeploy capital elsewhere.

Private Company Ownership

Our data indicates that Private Companies hold 46%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shiyue Daotian Group better, we need to consider many other factors. To that end, you should be aware of the 2 warning signs we've spotted with Shiyue Daotian Group .

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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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.