Insiders Were the Key Beneficiaries as Yadong Group Holdings Limited's (HKG:1795) Market Cap Rises to HK$2.6b

Simply Wall St · Nov 2, 2023 19:10

Key Insights

Insiders appear to have a vested interest in Yadong Group Holdings' growth, as seen by their sizeable ownership
The largest shareholder of the company is Shidong Xue with a 75% stake
Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

To get a sense of who is truly in control of Yadong Group Holdings Limited (HKG:1795), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 75% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, insiders scored the highest last week as the company hit HK$2.6b market cap following a 19% gain in the stock.

In the chart below, we zoom in on the different ownership groups of Yadong Group Holdings.

Check out our latest analysis for Yadong Group Holdings

ownership-breakdown — SEHK:1795 Ownership Breakdown November 2nd 2023

What Does The Lack Of Institutional Ownership Tell Us About Yadong Group Holdings?

Institutional investors often avoid companies that are too small, too illiquid or too risky for their tastes. But it's unusual to see larger companies without any institutional investors.

There are many reasons why a company might not have any institutions on the share registry. It may be hard for institutions to buy large amounts of shares, if liquidity (the amount of shares traded each day) is low. If the company has not needed to raise capital, institutions might lack the opportunity to build a position. It is also possible that fund managers don't own the stock because they aren't convinced it will perform well. Yadong Group Holdings might not have the sort of past performance institutions are looking for, or perhaps they simply have not studied the business closely.

earnings-and-revenue-growth — SEHK:1795 Earnings and Revenue Growth November 2nd 2023

Yadong Group Holdings is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Shidong Xue with 75% of shares outstanding. This essentially means that they have extensive influence, if not outright control, over the future of the corporation.

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. Our information suggests that there isn't any analyst coverage of the stock, so it is probably little known.

Insider Ownership Of Yadong Group Holdings

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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 most recent data indicates that insiders own the majority of Yadong Group Holdings Limited. This means they can collectively make decisions for the company. That means they own HK$1.9b worth of shares in the HK$2.6b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

With a 25% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yadong Group Holdings. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Yadong Group Holdings better, we need to consider many other factors. To that end, you should learn about the 3 warning signs we've spotted with Yadong Group Holdings (including 2 which are a bit unpleasant) .

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.