Shanghai Chicmax Cosmetic Co., Ltd.'s (HKG:2145) market cap rose HK$1.5b last week; employee share scheme who hold 41% profited and so did insiders

Key Insights

• Significant control over Shanghai Chicmax Cosmetic by employee share scheme implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 80% of the company
• Insiders have been selling lately

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Every investor in Shanghai Chicmax Cosmetic Co., Ltd. (HKG:2145) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 41% to be precise, is employee share scheme. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 4.8% increase in the stock price last week, employee share scheme profited the most, but insiders who own 39% stock also stood to gain from the increase.

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

Check out our latest analysis for Shanghai Chicmax Cosmetic

What Does The Institutional Ownership Tell Us About Shanghai Chicmax Cosmetic?

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.

Since institutions own only a small portion of Shanghai Chicmax Cosmetic, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. So if the company itself can improve over time, we may well see more institutional buyers in the future. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Shanghai Chicmax Cosmetic. Looking at our data, we can see that the largest shareholder is Shanghai Chicmax Cosmetic Co., Ltd, ESOP with 41% of shares outstanding. In comparison, the second and third largest shareholders hold about 39% and 0.6% of the stock. Yixiong Lyu, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shanghai Chicmax Cosmetic

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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 a reasonable proportion of Shanghai Chicmax Cosmetic Co., Ltd.. It is very interesting to see that insiders have a meaningful HK$13b stake in this HK$33b business. Most would be pleased to see the board is investing alongside them. You may wish to access this free chart showing recent trading by insiders.

General Public Ownership

The general public-- including retail investors -- own 17% stake in the company, and hence can't easily be ignored. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Chicmax Cosmetic better, we need to consider many other factors. Take risks for example - Shanghai Chicmax Cosmetic has 2 warning signs (and 1 which can't be ignored) we think you should know about.

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.