Central China New Life Limited's (HKG:9983) top holders are insiders and they are likely disappointed by the recent 10.0% drop

Key Insights

• Insiders appear to have a vested interest in Central China New Life's growth, as seen by their sizeable ownership
• 66% of the company is held by a single shareholder (Po Sum Wu)
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

If you want to know who really controls Central China New Life Limited (HKG:9983), then you'll have to look at the makeup of its share registry. With 71% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

As market cap fell to HK$1.4b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's take a closer look to see what the different types of shareholders can tell us about Central China New Life.

Check out our latest analysis for Central China New Life

What Does The Institutional Ownership Tell Us About Central China New Life?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

Since institutions own only a small portion of Central China New Life, 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. If the company is growing earnings, that may indicate that it is just beginning to catch the attention of these deep-pocketed investors. 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.

Hedge funds don't have many shares in Central China New Life. Po Sum Wu is currently the company's largest shareholder with 66% of shares outstanding. This implies that they have majority interest control of the future of the company. Hillhouse Investment Management, Ltd. is the second largest shareholder owning 6.6% of common stock, and Jun Wang holds about 3.7% of the company stock. Jun Wang, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Central China New Life

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.

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 information suggests that insiders own more than half of Central China New Life Limited. This gives them effective control of the company. So they have a HK$974m stake in this HK$1.4b business. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public-- including retail investors -- own 19% 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.

Private Equity Ownership

With an ownership of 6.6%, private equity firms are in a position to play a role in shaping corporate strategy with a focus on value creation. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Central China New Life better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Central China New Life (including 1 which is a bit concerning) .

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.