Key Insights

• Significant control over Zhejiang Yueling by retail investors implies that the general public has more power to influence management and governance-related decisions
• 48% of the business is held by the top 24 shareholders
• Insiders own 46% of Zhejiang Yueling

If you want to know who really controls Zhejiang Yueling Co., Ltd. (SZSE:002725), then you'll have to look at the makeup of its share registry. With 52% stake, retail investors possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

Following a 12% decrease in the stock price last week, retail investors suffered the most losses, but insiders who own 46% stock also took a hit.

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

What Does The Institutional Ownership Tell Us About Zhejiang Yueling?

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.

Since institutions own only a small portion of Zhejiang Yueling, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. 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.

Zhejiang Yueling is not owned by hedge funds. The company's largest shareholder is Xianming Lin, with ownership of 10%. For context, the second largest shareholder holds about 7.7% of the shares outstanding, followed by an ownership of 7.5% by the third-largest shareholder. Xinfu Lin, who is the second-largest shareholder, also happens to hold the title of Senior Key Executive. Additionally, the company's CEO Bin Lin directly holds 4.8% of the total shares outstanding.

On studying our ownership data, we found that 24 of the top shareholders collectively own less than 50% of the share register, implying that no single individual has a majority interest.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Zhejiang Yueling

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.

It seems insiders own a significant proportion of Zhejiang Yueling Co., Ltd.. Insiders have a CN¥1.4b stake in this CN¥3.1b business. 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

The general public, who are usually individual investors, hold a substantial 52% stake in Zhejiang Yueling, suggesting it is a fairly popular stock. With this amount of ownership, retail investors can collectively play a role in decisions that affect shareholder returns, such as dividend policies and the appointment of directors. They can also exercise the power to vote on acquisitions or mergers that may not improve profitability.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Zhejiang Yueling better, we need to consider many other factors. Take risks for example - Zhejiang Yueling has 2 warning signs (and 1 which makes us a bit uncomfortable) we think you should know about.

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.