Private companies are China YuHua Education Corporation Limited's (HKG:6169) biggest owners and were hit after market cap dropped HK$361m

Key Insights

• The considerable ownership by private companies in China YuHua Education indicates that they collectively have a greater say in management and business strategy
• 53% of the company is held by a single shareholder (Nai Hai Trust)
• 16% of China YuHua Education is held by Institutions

To get a sense of who is truly in control of China YuHua Education Corporation Limited (HKG:6169), it is important to understand the ownership structure of the business. We can see that private companies own the lion's share in the company with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, private companies endured the biggest losses as the stock fell by 12%.

In the chart below, we zoom in on the different ownership groups of China YuHua Education.

See our latest analysis for China YuHua Education

What Does The Institutional Ownership Tell Us About China YuHua Education?

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.

China YuHua Education already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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. 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 China YuHua Education's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in China YuHua Education. Nai Hai Trust is currently the company's largest shareholder with 53% of shares outstanding. This implies that they have majority interest control of the future of the company. With 8.0% and 3.9% of the shares outstanding respectively, Merrill Lynch & Co. Inc., Banking Investments and China Merchants Fund Management Company Ltd. are the second and third largest shareholders. Furthermore, CEO Hua Li is the owner of 0.7% of the company's shares.

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 are plenty of analysts covering the stock, so it might be worth seeing what they are forecasting, too.

Insider Ownership Of China YuHua Education

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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.

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.

We can see that insiders own shares in China YuHua Education Corporation Limited. It has a market capitalization of just HK$2.6b, and insiders have HK$32m worth of shares, in their own names. It is good to see some investment by insiders, but it might be worth checking if those insiders have been buying.

General Public Ownership

The general public, who are usually individual investors, hold a 30% stake in China YuHua Education. 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

It seems that Private Companies own 53%, of the China YuHua Education stock. 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:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider risks, for instance. Every company has them, and we've spotted 1 warning sign for China YuHua Education you should know about.

Ultimately the future is most important. You can access this free report on analyst forecasts for the company.

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.