Key Insights

• The considerable ownership by private companies in Foshan Haitian Flavouring and Food indicates that they collectively have a greater say in management and business strategy
• 58% of the company is held by a single shareholder (Guangdong Haitian Group Co., Ltd.)
• Insiders own 19% of Foshan Haitian Flavouring and Food

Every investor in Foshan Haitian Flavouring and Food Company Ltd. (SHSE:603288) should be aware of the most powerful shareholder groups. The group holding the most number of shares in the company, around 58% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Following a 3.7% increase in the stock price last week, private companies profited the most, but insiders who own 19% 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 Foshan Haitian Flavouring and Food.

See our latest analysis for Foshan Haitian Flavouring and Food

What Does The Institutional Ownership Tell Us About Foshan Haitian Flavouring and Food?

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.

Foshan Haitian Flavouring and Food already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. If multiple institutions change their view on a stock at the same time, you could see the share price drop fast. It's therefore worth looking at Foshan Haitian Flavouring and Food's earnings history below. Of course, the future is what really matters.

Foshan Haitian Flavouring and Food is not owned by hedge funds. The company's largest shareholder is Guangdong Haitian Group Co., Ltd., with ownership of 58%. This implies that they have majority interest control of the future of the company. In comparison, the second and third largest shareholders hold about 9.6% and 3.2% of the stock. Note that the second and third-largest shareholders are also Chief Executive Officer and Vice Chairman, respectively, meaning that the company's top shareholders are insiders.

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 Foshan Haitian Flavouring and Food

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.

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 Foshan Haitian Flavouring and Food Company Ltd.. It has a market capitalization of just CN¥284b, and insiders have CN¥53b worth of shares in their own names. That's quite significant. 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 15% stake in Foshan Haitian Flavouring and Food. 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

Our data indicates that Private Companies hold 58%, of the company's shares. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private company.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 2 warning signs for Foshan Haitian Flavouring and Food (1 is a bit unpleasant!) that you should be aware of before investing here.

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.