Key Insights

• Insiders appear to have a vested interest in Wencan Group's growth, as seen by their sizeable ownership
• A total of 4 investors have a majority stake in the company with 57% ownership
• 14% of Wencan Group is held by Institutions

If you want to know who really controls Wencan Group Co., Ltd. (SHSE:603348), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 46% 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 CN¥7.4b market cap following a 6.4% gain in the stock.

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

What Does The Institutional Ownership Tell Us About Wencan Group?

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.

As you can see, institutional investors have a fair amount of stake in Wencan Group. This implies the analysts working for those institutions have looked at the stock and they like it. But just like anyone else, they could be wrong. 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 Wencan Group's historic earnings and revenue below, but keep in mind there's always more to the story.

Wencan Group is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is the CEO Jie Xiong Tang with 23% of shares outstanding. The second and third largest shareholders are Jianyu Tang and Jie Bang Tang, with an equal amount of shares to their name at 11%. Interestingly, the third-largest shareholder, Jie Bang Tang is also a Vice Chairman, again, indicating strong insider ownership amongst the company's top shareholders.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

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. 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 Wencan Group

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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.

It seems insiders own a significant proportion of Wencan Group Co., Ltd.. Insiders own CN¥3.4b worth of shares in the CN¥7.4b company. That's quite meaningful. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 28% stake in Wencan Group. 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 11%, of the shares on issue. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wencan Group better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 3 warning signs for Wencan Group (of which 1 shouldn't be ignored!) you should know about.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.