Retail investors invested in Ningbo Huaxiang Electronic Co., Ltd. (SZSE:002048) copped the brunt of last week's CN¥530m market cap decline

Key Insights

• The considerable ownership by retail investors in Ningbo Huaxiang Electronic indicates that they collectively have a greater say in management and business strategy
• The top 4 shareholders own 53% of the company
• Insiders own 17% of Ningbo Huaxiang Electronic

If you want to know who really controls Ningbo Huaxiang Electronic Co., Ltd. (SZSE:002048), then you'll have to look at the makeup of its share registry. And the group that holds the biggest piece of the pie are retail investors with 41% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And following last week's 4.9% decline in share price, retail investors suffered the most losses.

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?

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 Ningbo Huaxiang Electronic does have institutional investors; and they hold a good portion of the company's stock. 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. When multiple institutions own a stock, there's always a risk that they are in a 'crowded trade'. When such a trade goes wrong, multiple parties may compete to sell stock fast. This risk is higher in a company without a history of growth. You can see Ningbo Huaxiang Electronic's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Ningbo Huaxiang Electronic. Ningbo Fengmei Industrial Co., Ltd. is currently the company's largest shareholder with 25% of shares outstanding. With 17% and 6.8% of the shares outstanding respectively, Xiaofeng Zhou and Zhong Ou Fund Management Co., Ltd are the second and third largest shareholders.

On looking further, we found that 53% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in the decisions of the company.

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 Ningbo Huaxiang Electronic

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.

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.

Our information suggests that insiders maintain a significant holding in Ningbo Huaxiang Electronic Co., Ltd.. It is very interesting to see that insiders have a meaningful CN¥1.8b 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, who are usually individual investors, hold a 41% stake in Ningbo Huaxiang Electronic. 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

We can see that Private Companies own 29%, of the shares on issue. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Take risks for example - Ningbo Huaxiang Electronic has 1 warning sign we think you should be aware of.

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.