The recent CN¥640m market cap decrease is likely to have disappointed insiders invested in Shenzhen VMAX New Energy Co., Ltd. (SHSE:688612)

Key Insights

• Shenzhen VMAX New Energy's significant insider ownership suggests inherent interests in company's expansion
• A total of 6 investors have a majority stake in the company with 51% ownership
• 13% of Shenzhen VMAX New Energy is held by Institutions

To get a sense of who is truly in control of Shenzhen VMAX New Energy Co., Ltd. (SHSE:688612), it is important to understand the ownership structure of the business. The group holding the most number of shares in the company, around 38% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, insiders endured the biggest losses as the stock fell by 5.9%.

Let's delve deeper into each type of owner of Shenzhen VMAX New Energy, beginning with the chart below.

Check out our latest analysis for Shenzhen VMAX New Energy

What Does The Institutional Ownership Tell Us About Shenzhen VMAX New Energy?

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.

We can see that Shenzhen VMAX New Energy 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 Shenzhen VMAX New Energy's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Shenzhen VMAX New Energy. The company's largest shareholder is Renchun Wan, with ownership of 19%. The second and third largest shareholders are Shenzhen Beiteer Enterprise Management Partnership Enterprise (Limited Partnership) and Shenzhen Tepusi Enterprise Management Partnership Enterprise (Limited Partnership), with an equal amount of shares to their name at 7.7%. Additionally, the company's CEO Jun Liu directly holds 6.5% of the total shares outstanding.

On further inspection, we found that more than half the company's shares are owned by the top 6 shareholders, suggesting that the interests of the larger shareholders are balanced out to an extent by the smaller ones.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Shenzhen VMAX New Energy

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. Company management run the business, but the CEO will answer to the board, even if he or she is a member of it.

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.

It seems insiders own a significant proportion of Shenzhen VMAX New Energy Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥3.9b stake in this CN¥10b business. 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-- including retail investors -- own 29% stake in the company, and hence can't easily be ignored. While this size of ownership may not be enough to sway a policy decision in their favour, they can still make a collective impact on company policies.

Private Company Ownership

Our data indicates that Private Companies hold 19%, of the company's shares. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shenzhen VMAX New Energy better, we need to consider many other factors. To that end, you should learn about the 2 warning signs we've spotted with Shenzhen VMAX New Energy (including 1 which makes us a bit uncomfortable) .

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.