Retail investors among Ningbo Huaxiang Electronic Co., Ltd.'s (SZSE:002048) largest stockholders and were hit after last week's 6.9% price drop

Key Insights

• Significant control over Ningbo Huaxiang Electronic by retail investors implies that the general public has more power to influence management and governance-related decisions
• 50% of the business is held by the top 5 shareholders
• Insiders own 17% of Ningbo Huaxiang Electronic

To get a sense of who is truly in control of Ningbo Huaxiang Electronic Co., Ltd. (SZSE:002048), it is important to understand the ownership structure of the business. We can see that retail investors own the lion's share in the company with 43% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And last week, retail investors endured the biggest losses as the stock fell by 6.9%.

Let's delve deeper into each type of owner of Ningbo Huaxiang Electronic, beginning with the chart below.

View our latest analysis for Ningbo Huaxiang Electronic

What Does The Institutional Ownership Tell Us About Ningbo Huaxiang Electronic?

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.

Ningbo Huaxiang Electronic 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. 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 Ningbo Huaxiang Electronic's earnings history below. Of course, the future is what really matters.

Ningbo Huaxiang Electronic is not owned by hedge funds. Looking at our data, we can see that the largest shareholder is Ningbo Fengmei Industrial Co., Ltd. with 25% of shares outstanding. Meanwhile, the second and third largest shareholders, hold 17% and 3.6%, of the shares outstanding, respectively.

On looking further, we found that 50% of the shares are owned by the top 5 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Ningbo Huaxiang Electronic

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.

Most consider insider ownership a positive because it can indicate the board is well aligned with other shareholders. However, on some occasions too much power is concentrated within this group.

It seems insiders own a significant proportion of Ningbo Huaxiang Electronic Co., Ltd.. Insiders own CN¥2.3b worth of shares in the CN¥13b company. That's quite meaningful. Most would say this shows a good degree of alignment with shareholders, especially in a company of this size. You can click here to see if those insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 43% stake in Ningbo Huaxiang Electronic. 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 29%, of the shares on issue. It's hard to draw any conclusions from this fact alone, so its worth looking into who owns those private companies. Sometimes insiders or other related parties have an interest in shares in a public company through a separate private 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. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Ningbo Huaxiang Electronic , and understanding them should be part of your investment process.

If you would prefer discover what analysts are predicting in terms of future growth, do not miss this free report on analyst forecasts.

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.