Private companies among Henan Huaying Agricultural Development Co., Ltd.’s (SZSE:002321) largest stockholders and were hit after last week’s 9.8% price drop

Key Insights

• The considerable ownership by private companies in Henan Huaying Agricultural Development indicates that they collectively have a greater say in management and business strategy
• A total of 5 investors have a majority stake in the company with 51% ownership
• Using data from company’s past performance alongside ownership research, one can better assess the future performance of a company

Introduction

A look at the shareholders of Henan Huaying Agricultural Development Co., Ltd. (SZSE:002321) can tell us which group is most powerful. We can see that private companies own the lion’s share in the company with 52% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As market cap fell to CN¥3.9b last week, private companies would have faced the highest losses than any other shareholder groups of the company.

Institutional Ownership

Institutions typically measure themselves against a benchmark when reporting to their own investors, so they often become more enthusiastic about a stock once it’s included in a major index. We would expect most companies to have some institutions on the register, especially if they are growing.

We can see that Henan Huaying Agricultural Development does have institutional investors; and they hold a good portion of the company’s stock. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Henan Huaying Agricultural Development’s earnings history below. Of course, the future is what really matters.

Insider Ownership

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

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Our most recent data indicates that insiders own less than 1% of Henan Huaying Agricultural Development Co., Ltd.. We do note, however, it is possible insiders have an indirect interest through a private company or other corporate structure. It appears that the board holds about CN¥17m worth of stock. This compares to a market capitalization of CN¥3.9b. Many tend to prefer to see a board with bigger shareholdings.

General Public Ownership

The general public– including retail investors — own 41% stake in the company, and hence can’t easily be ignored. 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

It seems that Private Companies own 52%, of the Henan Huaying Agricultural Development stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Consider risks, for instance. Every company has them, and we’ve spotted 1 warning sign for Henan Huaying Agricultural Development you should know about.

If you would prefer check out another company — one with potentially superior financials — then do not miss this free list of interesting companies, backed by strong financial data.

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.

Valuation is complex, but we’re helping make it simple.

Find out whether Henan Huaying Agricultural Development is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.

SDGs, Targets, and Indicators Analysis

1. SDGs Addressed

   • SDG 8: Decent Work and Economic Growth
   • SDG 9: Industry, Innovation, and Infrastructure
   • SDG 16: Peace, Justice, and Strong Institutions

2. Targets Identified

   • SDG 8.10: Strengthen the capacity of domestic financial institutions to encourage and expand access to banking, insurance, and financial services for all
   • SDG 9.3: Increase the access of small-scale industrial and other enterprises to financial services, including affordable credit, and their integration into value chains and markets
   • SDG 16.6: Develop effective, accountable, and transparent institutions at all levels

3. Indicators Mentioned or Implied

   • Ownership percentage of private companies in Henan Huaying Agricultural Development
   • Market capitalization of Henan Huaying Agricultural Development
   • Percentage of shares owned by top 5 shareholders
   • Percentage of shares owned by institutional investors
   • Percentage of shares owned by insiders
   • Percentage of shares owned by the general public

Table: SDGs, Targets, and Indicators

Behold! This splendid article springs forth from the wellspring of knowledge, shaped by a wondrous proprietary AI technology that delved into a vast ocean of data, illuminating the path towards the Sustainable Development Goals. Remember that all rights are reserved by SDG Investors LLC, empowering us to champion progress together.

Source: simplywall.st

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