Key Insights

• Qianhe Condiment and Food's significant insider ownership suggests inherent interests in company's expansion
• 51% of the business is held by the top 3 shareholders
• 11% of Qianhe Condiment and Food is held by Institutions

A look at the shareholders of Qianhe Condiment and Food Co., Ltd. (SHSE:603027) can tell us which group is most powerful. The group holding the most number of shares in the company, around 51% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit CN¥17b market cap following a 8.2% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Qianhe Condiment and Food.

What Does The Institutional Ownership Tell Us About Qianhe Condiment and 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 Qianhe Condiment and 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Qianhe Condiment and Food's historic earnings and revenue below, but keep in mind there's always more to the story.

Qianhe Condiment and Food is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Chao Qun Wu with 41% of shares outstanding. With 9.2% and 1.6% of the shares outstanding respectively, Jian Yong Wu and HuaAn Fund Management Company Ltd. are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Qianhe Condiment and Food

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

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 Qianhe Condiment and Food Co., Ltd.. This gives them effective control of the company. Given it has a market cap of CN¥17b, that means insiders have a whopping CN¥8.6b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 38% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qianhe Condiment and Food. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Qianhe Condiment and Food is showing 2 warning signs 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.