Key Insights

• Significant insider control over Hebei Yangyuan ZhiHui Beverage implies vested interests in company growth
• 59% of the business is held by the top 4 shareholders
• Past performance of a company along with ownership data serve to give a strong idea about prospects for a business

Every investor in Hebei Yangyuan ZhiHui Beverage Co., Ltd. (SHSE:603156) should be aware of the most powerful shareholder groups. With 52% 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 a result, insiders were the biggest beneficiaries of last week's 4.1% gain.

In the chart below, we zoom in on the different ownership groups of Hebei Yangyuan ZhiHui Beverage.

What Does The Institutional Ownership Tell Us About Hebei Yangyuan ZhiHui Beverage?

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.

Institutions have a very small stake in Hebei Yangyuan ZhiHui Beverage. That indicates that the company is on the radar of some funds, but it isn't particularly popular with professional investors at the moment. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. When multiple institutional investors want to buy shares, we often see a rising share price. The past revenue trajectory (shown below) can be an indication of future growth, but there are no guarantees.

Hebei Yangyuan ZhiHui Beverage is not owned by hedge funds. Our data shows that Kuizhang Yao is the largest shareholder with 21% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 18% and 9.9%, of the shares outstanding, respectively. Hongbing Li, who is the third-largest shareholder, also happens to hold the title of Chairman of Corporate Board. Furthermore, CEO Zhaolin Fan is the owner of 9.9% of the company's shares.

On looking further, we found that 59% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Hebei Yangyuan ZhiHui Beverage

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.

It seems that insiders own more than half the Hebei Yangyuan ZhiHui Beverage Co., Ltd. stock. This gives them a lot of power. Insiders own CN¥15b worth of shares in the CN¥28b company. That's extraordinary! 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, who are usually individual investors, hold a 26% stake in Hebei Yangyuan ZhiHui Beverage. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 18%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hebei Yangyuan ZhiHui Beverage better, we need to consider many other factors. Be aware that Hebei Yangyuan ZhiHui Beverage is showing 2 warning signs in our investment analysis , and 1 of those is significant...

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.