China Youran Dairy Group Limited's (HKG:9858) largest shareholders are public companies who were rewarded as market cap surged HK$417m last week

Key Insights

• Significant control over China Youran Dairy Group by public companies implies that the general public has more power to influence management and governance-related decisions
• A total of 2 investors have a majority stake in the company with 66% ownership
• 15% of China Youran Dairy Group is held by insiders

Every investor in China Youran Dairy Group Limited (HKG:9858) should be aware of the most powerful shareholder groups. With 35% stake, public companies possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, public companies benefitted the most after the company's market cap rose by HK$417m last week.

Let's take a closer look to see what the different types of shareholders can tell us about China Youran Dairy Group.

See our latest analysis for China Youran Dairy Group

What Does The Institutional Ownership Tell Us About China Youran Dairy Group?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

China Youran Dairy Group already has institutions on the share registry. Indeed, they own a respectable stake in the company. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of China Youran Dairy Group, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in China Youran Dairy Group. Inner Mongolia Yili Industrial Group Co., Ltd. is currently the largest shareholder, with 35% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 31% and 15%, of the shares outstanding, respectively.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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 China Youran Dairy Group

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 information suggests that insiders maintain a significant holding in China Youran Dairy Group Limited. It has a market capitalization of just HK$6.0b, and insiders have HK$898m worth of shares in their own names. 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 13% 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

We can see that public companies hold 35% of the China Youran Dairy Group shares on issue. 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. For instance, we've identified 1 warning sign for China Youran Dairy Group that 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.