Private equity firms are Yatsen Holding Limited's (NYSE:YSG) biggest owners and were hit after market cap dropped US$118m

Key Insights

• Significant control over Yatsen Holding by private equity firms implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 52% of the company
• Insiders own 37% of Yatsen Holding

To get a sense of who is truly in control of Yatsen Holding Limited (NYSE:YSG), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private equity firms with 38% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While the holdings of private equity firms took a hit after last week’s 25% price drop, insiders with their 37% also suffered.

Let's take a closer look to see what the different types of shareholders can tell us about Yatsen Holding.

See our latest analysis for Yatsen Holding

What Does The Institutional Ownership Tell Us About Yatsen Holding?

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.

Less than 5% of Yatsen Holding is held by institutional investors. This suggests that some funds have the company in their sights, but many have not yet bought shares in it. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. 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 Yatsen Holding. Looking at our data, we can see that the largest shareholder is the CEO Jinfeng Huang with 31% of shares outstanding. For context, the second largest shareholder holds about 20% of the shares outstanding, followed by an ownership of 10% by the third-largest shareholder.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 52% stake.

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 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 Yatsen Holding

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.

It seems insiders own a significant proportion of Yatsen Holding Limited. Insiders own US$132m worth of shares in the US$352m company. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public-- including retail investors -- own 20% stake in the company, and hence can't easily be ignored. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Equity Ownership

Private equity firms hold a 38% stake in Yatsen Holding. This suggests they can be influential in key policy decisions. Some investors might be encouraged by this, since private equity are sometimes able to encourage strategies that help the market see the value in the company. Alternatively, those holders might be exiting the investment after taking it public.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Yatsen Holding better, we need to consider many other factors. Be aware that Yatsen Holding is showing 1 warning sign in our investment analysis , you should know about...

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.