Stock Analysis

Fufeng Group Limited (HKG:546) Top Key Executive Xuechun Li, the company's largest shareholder sees 4.7%reduction in holdings value

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SEHK:546
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Key Insights

If you want to know who really controls Fufeng Group Limited (HKG:546), then you'll have to look at the makeup of its share registry. We can see that individual insiders own the lion's share in the company with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As market cap fell to HK$12b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

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

See our latest analysis for Fufeng Group

ownership-breakdown
SEHK:546 Ownership Breakdown March 19th 2023

What Does The Institutional Ownership Tell Us About Fufeng 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.

We can see that Fufeng Group does have institutional investors; and they hold a good portion of the company's stock. 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 Fufeng Group, (below). Of course, keep in mind that there are other factors to consider, too.

earnings-and-revenue-growth
SEHK:546 Earnings and Revenue Growth March 19th 2023

Hedge funds don't have many shares in Fufeng Group. Our data suggests that Xuechun Li, who is also the company's Top Key Executive, holds the most number of shares at 39%. When an insider holds a sizeable amount of a company's stock, investors consider it as a positive sign because it suggests that insiders are willing to have their wealth tied up in the future of the company. Meanwhile, the second and third largest shareholders, hold 15% and 6.3%, of the shares outstanding, respectively. Additionally, the company's CEO Deheng Li directly holds 1.4% of the total shares outstanding.

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.

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 is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Fufeng 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.

It seems insiders own a significant proportion of Fufeng Group Limited. Insiders own HK$4.8b worth of shares in the HK$12b company. That's quite meaningful. 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

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Fufeng Group. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

It seems that Private Companies own 6.3%, of the Fufeng Group stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Be aware that Fufeng Group is showing 1 warning sign in our investment analysis , you should know about...

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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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