I am going to take a deep dive into Yashili International Holdings Ltd’s (SEHK:1230) most recent ownership structure, not a frequent subject of discussion among individual investors. The impact of a company’s ownership structure affects both its short- and long-term performance. Since the effect of an active institutional investor with a similar ownership as a passive pension-fund can be vastly different on a company’s corporate governance and accountability of shareholders, investors should take a closer look at 1230’s shareholder registry. All data provided is as of the most recent financial year end.
View our latest analysis for Yashili International Holdings
Institutional Ownership
Due to the big order sizes of institutional investors, a company’s shares can experience large, one-sided momentum, driven by high volume of shares removed from, or injected into, the market. A low institutional ownership of 1.16% puts 1230 on a list of companies that are not likely exposed to spikes in volatility resulting from institutional trading. 1230 is covered by more than three analysts. This leaves few reasons on why institutions wouldn’t have discovered the company.
General Public Ownership
A big stake of 16.41% in 1230 is held by the general public. This size of ownership gives retail investors collective power in deciding on major policy decisions such as executive compensation, appointment of directors and acquisitions of businesses. This level of ownership gives retail investors the power to sway key policy decisions such as board composition, executive compensation, and potential acquisitions. This is a positive sign for an investor who wants to be involved in key decision-making of the company.
Private Company Ownership
Another important group of owners for potential investors in 1230 are private companies that hold a stake of 6.39% in 1230. These are companies that are mainly invested due to their strategic interests or are incentivized by reaping capital gains on investments their shareholdings. With this size of ownership in 1230, this ownership class can affect the company’s business strategy. As a result, potential investors should further explore the company’s business relations with these companies and find out if they can affect shareholder returns in the long-term.
What this means for you:
Institutional ownership in 1230 is not at a level that would concern investors. We are less likely to see sustained downtrends or significant volatility resulting from large institutional trading. However, ownership structure should not be the only focus of your research when constructing an investment thesis around 1230. Rather, you should be examining fundamental factors such as Yashili International Holdings’s past track record and financial health. I highly recommend you to complete your research by taking a look at the following: