Ningbo KBE Electrical Technology Co.,Ltd.'s (SZSE:300863) market cap surged CN¥537m last week, private companies who have a lot riding on the company were rewarded

Key Insights

• The considerable ownership by private companies in Ningbo KBE Electrical TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• The largest shareholder of the company is Ningbo Xinxie Industrial Group Co., Ltd. with a 57% stake
• Ownership research, combined with past performance data can help provide a good understanding of opportunities in a stock

If you want to know who really controls Ningbo KBE Electrical Technology Co.,Ltd. (SZSE:300863), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is private companies. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

Clearly, private companies benefitted the most after the company's market cap rose by CN¥537m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Ningbo KBE Electrical TechnologyLtd.

See our latest analysis for Ningbo KBE Electrical TechnologyLtd

What Does The Institutional Ownership Tell Us About Ningbo KBE Electrical TechnologyLtd?

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.

Ningbo KBE Electrical TechnologyLtd 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. It is not uncommon to see a big share price drop if two large institutional investors try to sell out of a stock at the same time. So it is worth checking the past earnings trajectory of Ningbo KBE Electrical TechnologyLtd, (below). Of course, keep in mind that there are other factors to consider, too.

Ningbo KBE Electrical TechnologyLtd is not owned by hedge funds. Ningbo Xinxie Industrial Group Co., Ltd. is currently the company's largest shareholder with 57% of shares outstanding. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 3.6% and 1.4% of the shares outstanding respectively, Guangyao Lin and Ningbo Yifeng Private Fund Management Co., Ltd. are the second and third largest shareholders. Guangyao Lin, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

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 some analyst coverage of the stock, but it could still become more well known, with time.

Insider Ownership Of Ningbo KBE Electrical TechnologyLtd

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.

Shareholders would probably be interested to learn that insiders own shares in Ningbo KBE Electrical Technology Co.,Ltd.. It has a market capitalization of just CN¥5.6b, and insiders have CN¥287m 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 31% stake in Ningbo KBE Electrical TechnologyLtd. 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

It seems that Private Companies own 57%, of the Ningbo KBE Electrical TechnologyLtd 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:

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 KBE Electrical TechnologyLtd has 2 warning signs (and 1 which is significant) we think you should know about.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team (at) simplywallst.com.

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.