Key Insights

• Suzhou Weizhixiang Food's significant insider ownership suggests inherent interests in company's expansion
• The largest shareholder of the company is Jing Xia with a 55% stake
• Analyst forecasts along with ownership data serve to give a strong idea about prospects for a business

To get a sense of who is truly in control of Suzhou Weizhixiang Food Co., Ltd. (SHSE:605089), it is important to understand the ownership structure of the business. We can see that individual insiders own the lion's share in the company with 66% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 10% decline in share price, insiders suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Suzhou Weizhixiang Food.

Check out our latest analysis for Suzhou Weizhixiang Food

What Does The Institutional Ownership Tell Us About Suzhou Weizhixiang Food?

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 Suzhou Weizhixiang Food does have institutional investors; and they hold a good portion of the company's stock. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Suzhou Weizhixiang Food, (below). Of course, keep in mind that there are other factors to consider, too.

We note that hedge funds don't have a meaningful investment in Suzhou Weizhixiang Food. With a 55% stake, CEO Jing Xia is the largest shareholder. With such a huge stake, we infer that they have significant control of the future of the company. It's usually considered a good sign when insiders own a significant number of shares in the company, and in this case, we're glad to see a company insider with such skin in the game. The second and third largest shareholders are Jiulin Xia and Suzhou Jinhuasheng Management Consulting Enterprise (Limited Partnership), with an equal amount of shares to their name at 7.5%. Interestingly, the second-largest shareholder, Jiulin Xia is also Other Key Executive, again, pointing towards strong insider ownership amongst the company's top shareholders.

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 plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Suzhou Weizhixiang Food

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems that insiders own more than half the Suzhou Weizhixiang Food Co., Ltd. stock. This gives them a lot of power. So they have a CN¥2.9b stake in this CN¥4.4b business. 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, who are usually individual investors, hold a 19% stake in Suzhou Weizhixiang Food. 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 Company Ownership

Our data indicates that Private Companies hold 7.5%, of the company's shares. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

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. For example, we've discovered 2 warning signs for Suzhou Weizhixiang Food (1 is a bit unpleasant!) that you should be aware of before investing here.

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.