Key Insights

• Insiders appear to have a vested interest in Sichuan Teway Food GroupLtd's growth, as seen by their sizeable ownership
• 69% of the company is held by a single shareholder (Wen Deng)
• Institutional ownership in Sichuan Teway Food GroupLtd is 12%

To get a sense of who is truly in control of Sichuan Teway Food Group Co.,Ltd (SHSE:603317), 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 69% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 5.0% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sichuan Teway Food GroupLtd.

What Does The Institutional Ownership Tell Us About Sichuan Teway Food GroupLtd?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Sichuan Teway Food GroupLtd does have institutional investors; and they hold a good portion of the company's stock. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Sichuan Teway Food GroupLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Hedge funds don't have many shares in Sichuan Teway Food GroupLtd. With a 69% stake, CEO Wen Deng is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Shanghai Sixie Investment Management Co., Ltd. is the second largest shareholder owning 3.0% of common stock, and Shenzhen Yingfu Huizhi Private Securities Fund Co., Ltd. holds about 2.0% of the company stock.

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 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 Sichuan Teway Food GroupLtd

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.

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.

Our most recent data indicates that insiders own the majority of Sichuan Teway Food Group Co.,Ltd. This means they can collectively make decisions for the company. That means insiders have a very meaningful CN¥7.3b stake in this CN¥11b business. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public-- including retail investors -- own 18% stake in the company, and hence can't easily be ignored. 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 Sichuan Teway Food GroupLtd 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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com