After buying recently, Xin Yuan Enterprises Group Limited (HKG:1748) insiders must be dismayed to see the company's market cap drop to HK$1.8b

Key Insights

• Significant insider control over Xin Yuan Enterprises Group implies vested interests in company growth
• The top 4 shareholders own 52% of the company
• Recent purchases by insiders

A look at the shareholders of Xin Yuan Enterprises Group Limited (HKG:1748) can tell us which group is most powerful. The group holding the most number of shares in the company, around 79% to be precise, is individual insiders. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

It's interesting to note that insiders have been buying shares recently. However, with market cap down by HK$220m over the last week, their expectations were far from met.

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

View our latest analysis for Xin Yuan Enterprises Group

What Does The Lack Of Institutional Ownership Tell Us About Xin Yuan Enterprises Group?

Small companies that are not very actively traded often lack institutional investors, but it's less common to see large companies without them.

There could be various reasons why no institutions own shares in a company. Typically, small, newly listed companies don't attract much attention from fund managers, because it would not be possible for large fund managers to build a meaningful position in the company. On the other hand, it's always possible that professional investors are avoiding a company because they don't think it's the best place for their money. Institutional investors may not find the historic growth of the business impressive, or there might be other factors at play. You can see the past revenue performance of Xin Yuan Enterprises Group, for yourself, below.

We note that hedge funds don't have a meaningful investment in Xin Yuan Enterprises Group. Maochun Chen is currently the largest shareholder, with 26% of shares outstanding. With 9.5% and 8.2% of the shares outstanding respectively, Liangquan Fan and Kai Wu are the second and third largest shareholders. Additionally, the company's CEO Wenjun Xu directly holds 7.7% of the total shares outstanding.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. 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 Xin Yuan Enterprises 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. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

It seems that insiders own more than half the Xin Yuan Enterprises Group Limited stock. This gives them a lot of power. That means they own HK$1.4b worth of shares in the HK$1.8b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Xin Yuan Enterprises Group better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Xin Yuan Enterprises Group , and understanding them should be part of your investment process.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.