Key Insights

• The considerable ownership by individual investors in Yangzijiang Financial Holding indicates that they collectively have a greater say in management and business strategy
• The top 8 shareholders own 50% of the company
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Yangzijiang Financial Holding Ltd. (SGX:YF8), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 47% to be precise, is individual investors. Put another way, the group faces the maximum upside potential (or downside risk).

Clearly, individual investors benefitted the most after the company's market cap rose by S$88m last week.

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

What Does The Institutional Ownership Tell Us About Yangzijiang Financial Holding?

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.

Yangzijiang Financial Holding 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. 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 Yangzijiang Financial Holding's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Yangzijiang Financial Holding. Our data shows that YZJ Settlement Julius Baer Trust Company is the largest shareholder with 24% of shares outstanding. With 11% and 4.7% of the shares outstanding respectively, Lido Point Investments Ltd. and Yuanlin Ren are the second and third largest shareholders. Yuanlin Ren, who is the third-largest shareholder, also happens to hold the title of Chairman of the Board.

We did some more digging and found that 8 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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. There is some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Yangzijiang Financial Holding

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

Shareholders would probably be interested to learn that insiders own shares in Yangzijiang Financial Holding Ltd.. As individuals, the insiders collectively own S$66m worth of the S$1.2b company. This shows at least some alignment. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 47% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Yangzijiang Financial Holding. This size of ownership, while considerable, may not be enough to change company policy if the decision is not in sync with other large shareholders.

Private Company Ownership

We can see that Private Companies own 40%, 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Case in point: We've spotted 1 warning sign for Yangzijiang Financial Holding you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its 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.