Yip's Chemical Holdings Limited's (HKG:408): Top Key Executive Chi Shing Ip is the most bullish insider, and their stock value gained 11% last week

Key Insights

• Significant insider control over Yip's Chemical Holdings implies vested interests in company growth
• The top 4 shareholders own 57% of the company
• 16% of Yip's Chemical Holdings is held by Institutions

If you want to know who really controls Yip's Chemical Holdings Limited (HKG:408), 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 individual insiders with 50% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

As a result, insiders scored the highest last week as the company hit HK$921m market cap following a 11% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Yip's Chemical Holdings.

View our latest analysis for Yip's Chemical Holdings

What Does The Institutional Ownership Tell Us About Yip's Chemical Holdings?

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 Yip's Chemical Holdings does have institutional investors; and they hold a good portion of the company's stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Yip's Chemical Holdings' historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Yip's Chemical Holdings. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Yip's Chemical Holdings' case, its Top Key Executive, Chi Shing Ip, is the largest shareholder, holding 30% of shares outstanding. FMR LLC is the second largest shareholder owning 11% of common stock, and Fung Kuen Ip holds about 8.7% of the company stock. Additionally, the company's CEO Kwan Ip directly holds 4.7% of the total shares outstanding.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Yip's Chemical Holdings

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.

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 Yip's Chemical Holdings Limited. This means they can collectively make decisions for the company. That means they own HK$465m worth of shares in the HK$921m company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 33% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yip's Chemical Holdings. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Like risks, for instance. Every company has them, and we've spotted 2 warning signs for Yip's Chemical Holdings (of which 1 is a bit unpleasant!) you should know about.

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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.