Key Insights

• Chengdu Hongqi ChainLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 4 investors have a majority stake in the company with 51% ownership
• Insider ownership in Chengdu Hongqi ChainLtd is 28%

Every investor in Chengdu Hongqi Chain Co.,Ltd. (SZSE:002697) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 40% to be precise, is individual 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 7.5% increase in the stock price last week, individual investors profited the most, but insiders who own 28% stock also stood to gain from the increase.

Let's take a closer look to see what the different types of shareholders can tell us about Chengdu Hongqi ChainLtd.

What Does The Institutional Ownership Tell Us About Chengdu Hongqi ChainLtd?

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 Chengdu Hongqi ChainLtd. 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. 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 Chengdu Hongqi ChainLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Chengdu Hongqi ChainLtd is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Shiru Cao with 24% of shares outstanding. Yonghui Superstores Co., Ltd. is the second largest shareholder owning 21% of common stock, and Zeng Jun Cao holds about 3.6% of the company stock. Interestingly, the third-largest shareholder, Zeng Jun Cao is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

Our research also brought to light the fact that roughly 51% of the company is controlled by the top 4 shareholders suggesting that these owners wield significant influence on the business.

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

Insider Ownership Of Chengdu Hongqi ChainLtd

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

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that insiders maintain a significant holding in Chengdu Hongqi Chain Co.,Ltd.. It has a market capitalization of just CN¥6.1b, and insiders have CN¥1.7b worth of shares in their own names. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 40% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Chengdu Hongqi ChainLtd. 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.

Public Company Ownership

It appears to us that public companies own 21% of Chengdu Hongqi ChainLtd. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

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 instance, we've identified 1 warning sign for Chengdu Hongqi ChainLtd that you should be aware of.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.