Key Insights

• Insiders appear to have a vested interest in Toly BreadLtd's growth, as seen by their sizeable ownership
• The top 2 shareholders own 51% of the company
• Institutions own 11% of Toly BreadLtd

To get a sense of who is truly in control of Toly Bread Co.,Ltd. (SHSE:603866), it is important to understand the ownership structure of the business. With 63% stake, individual insiders possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥9.0b last week, insiders would have faced the highest losses than any other shareholder groups of the company.

Let's delve deeper into each type of owner of Toly BreadLtd, beginning with the chart below.

What Does The Institutional Ownership Tell Us About Toly BreadLtd?

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.

As you can see, institutional investors have a fair amount of stake in Toly BreadLtd. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Toly BreadLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Toly BreadLtd. Because actions speak louder than words, we consider it a good sign when insiders own a significant stake in a company. In Toly BreadLtd's case, its Senior Key Executive, Xue Qun Wu, is the largest shareholder, holding 37% of shares outstanding. For context, the second largest shareholder holds about 14% of the shares outstanding, followed by an ownership of 9.5% by the third-largest shareholder. Interestingly, the second-largest shareholder, Liang Xue Wu is also Chief Executive Officer, again, pointing towards strong insider ownership amongst the company's top shareholders.

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.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of Toly BreadLtd

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 most recent data indicates that insiders own the majority of Toly Bread Co.,Ltd.. This means they can collectively make decisions for the company. Given it has a market cap of CN¥9.0b, that means insiders have a whopping CN¥5.7b worth of shares in their own names. Most would argue this is a positive, showing strong alignment with shareholders. You can click here to see if they have been selling down their stake.

General Public Ownership

The general public-- including retail investors -- own 26% 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.

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. Case in point: We've spotted 1 warning sign for Toly BreadLtd you should be aware of.

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.