China Youran Dairy Group Limited's (HKG:9858) biggest owners are public companies who got richer after stock soared 3.5% last week

By
Simply Wall St
Published
February 22, 2022
SEHK:9858
Source: Shutterstock

If you want to know who really controls China Youran Dairy Group Limited (HKG:9858), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 35% to be precise, is public companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, public companies benefitted the most after the company's market cap rose by HK$569m last week.

In the chart below, we zoom in on the different ownership groups of China Youran Dairy Group.

See our latest analysis for China Youran Dairy Group

ownership-breakdown
SEHK:9858 Ownership Breakdown February 22nd 2022

What Does The Institutional Ownership Tell Us About China Youran Dairy 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.

Less than 5% of China Youran Dairy Group 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.

earnings-and-revenue-growth
SEHK:9858 Earnings and Revenue Growth February 22nd 2022

China Youran Dairy Group is not owned by hedge funds. The company's largest shareholder is Inner Mongolia Yili Industrial Group Co., Ltd., with ownership of 35%. With 31% and 15% of the shares outstanding respectively, PAG and Meirong Hao are the second and third largest shareholders.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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

Insider Ownership Of China Youran Dairy 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.

It seems insiders own a significant proportion of China Youran Dairy Group Limited. Insiders own HK$2.5b worth of shares in the HK$17b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 11% stake in China Youran Dairy Group. 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

Private equity firms hold a 31% stake in China Youran Dairy Group. This suggests they can be influential in key policy decisions. Some might like this, because private equity are sometimes activists who hold management accountable. But other times, private equity is selling out, having taking the company public.

Public Company Ownership

It appears to us that public companies own 35% of China Youran Dairy Group. We can't be certain but it is quite possible this is a strategic stake. The businesses may be similar, or work together.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand China Youran Dairy Group better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with China Youran Dairy Group (including 1 which is a bit concerning) .

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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