Public companies are Maoyan Entertainment's (HKG:1896) biggest owners and were hit after market cap dropped HK$495m

Key Insights

• Significant control over Maoyan Entertainment by public companies implies that the general public has more power to influence management and governance-related decisions
• The top 3 shareholders own 55% of the company
• Insider ownership in Maoyan Entertainment is 26%

Trump has pledged to "unleash" American oil and gas and these 15 US stocks have developments that are poised to benefit.

Every investor in Maoyan Entertainment (HKG:1896) should be aware of the most powerful shareholder groups. We can see that public companies own the lion's share in the company with 38% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 5.3% decrease in the stock price last week, public companies suffered the most losses, but insiders who own 26% stock also took a hit.

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

See our latest analysis for Maoyan Entertainment

What Does The Institutional Ownership Tell Us About Maoyan Entertainment?

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 Maoyan Entertainment 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. 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 Maoyan Entertainment, (below). Of course, keep in mind that there are other factors to consider, too.

Maoyan Entertainment is not owned by hedge funds. Changtian Wang is currently the company's largest shareholder with 24% of shares outstanding. Beijing Enlight Media Co., Ltd is the second largest shareholder owning 17% of common stock, and Tencent Holdings Limited holds about 14% of the company stock. Furthermore, CEO Zhihao Zheng is the owner of 2.1% of the company's shares.

A more detailed study of the shareholder registry showed us that 3 of the top shareholders have a considerable amount of ownership in the company, via their 55% stake.

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. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Maoyan Entertainment

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.

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.

Our most recent data indicates that insiders own a reasonable proportion of Maoyan Entertainment. Insiders own HK$2.3b worth of shares in the HK$8.8b 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

The general public-- including retail investors -- own 21% stake in the company, and hence can't easily be ignored. 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.

Private Company Ownership

It seems that Private Companies own 5.7%, of the Maoyan Entertainment stock. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Public Company Ownership

It appears to us that public companies own 38% of Maoyan Entertainment. 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 Maoyan Entertainment better, we need to consider many other factors. Take risks for example - Maoyan Entertainment has 2 warning signs (and 1 which is significant) we think you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.