Key Insights

• Shanghai Lily&Beauty CosmeticsLtd's significant retail investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 2 investors have a majority stake in the company with 50% ownership
• Insiders own 32% of Shanghai Lily&Beauty CosmeticsLtd

A look at the shareholders of Shanghai Lily&Beauty Cosmetics Co.,Ltd. (SHSE:605136) can tell us which group is most powerful. The group holding the most number of shares in the company, around 33% to be precise, is retail investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Following a 16% increase in the stock price last week, retail investors profited the most, but insiders who own 32% stock also stood to gain from the increase.

Let's delve deeper into each type of owner of Shanghai Lily&Beauty CosmeticsLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Shanghai Lily&Beauty CosmeticsLtd?

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.

Shanghai Lily&Beauty CosmeticsLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Shanghai Lily&Beauty CosmeticsLtd, (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 Shanghai Lily&Beauty CosmeticsLtd. Looking at our data, we can see that the largest shareholder is the CEO Tao Huang with 32% of shares outstanding. In comparison, the second and third largest shareholders hold about 18% and 4.9% of the stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Shanghai Lily&Beauty CosmeticsLtd

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.

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 Shanghai Lily&Beauty Cosmetics Co.,Ltd.. Insiders own CN¥875m worth of shares in the CN¥2.7b company. This may suggest that the founders still own a lot of shares. You can click here to see if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 33% stake in Shanghai Lily&Beauty CosmeticsLtd. 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

It seems that Private Companies own 22%, of the Shanghai Lily&Beauty CosmeticsLtd stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Shanghai Lily&Beauty CosmeticsLtd better, we need to consider many other factors. To that end, you should be aware of the 3 warning signs we've spotted with Shanghai Lily&Beauty CosmeticsLtd .

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.