Following recent decline, NINGBO HENGSHUAI Co., LTD.'s (SZSE:300969) top shareholder CEO Ningning Xu sees holdings value drop by 6.1%

Key Insights

• Insiders appear to have a vested interest in NINGBO HENGSHUAI's growth, as seen by their sizeable ownership
• 54% of the company is held by a single shareholder (Ningning Xu)
• Ownership research along with analyst forecasts data help provide a good understanding of opportunities in a stock

A look at the shareholders of NINGBO HENGSHUAI Co., LTD. (SZSE:300969) can tell us which group is most powerful. With 71% stake, individual insiders possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 6.1% decline in share price, insiders suffered the most losses.

Let's delve deeper into each type of owner of NINGBO HENGSHUAI, beginning with the chart below.

View our latest analysis for NINGBO HENGSHUAI

What Does The Institutional Ownership Tell Us About NINGBO HENGSHUAI?

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 HENGSHUAI 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 NINGBO HENGSHUAI's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in NINGBO HENGSHUAI. With a 54% stake, CEO Ningning Xu is the largest shareholder. This essentially means that they have significant control over the outcome or future of the company, which is why insider ownership is usually looked upon favourably by prospective buyers. Meanwhile, the second and third largest shareholders, hold 18% and 2.7%, of the shares outstanding, respectively.

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 HENGSHUAI

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

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 that insiders own more than half the NINGBO HENGSHUAI Co., LTD. stock. This gives them a lot of power. That means they own CN¥4.6b worth of shares in the CN¥6.5b company. That's quite meaningful. Most would be pleased to see the board is investing alongside them. You may wish todiscover (for free) if they have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 17% stake in NINGBO HENGSHUAI. 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

It seems that Private Companies own 3.2%, of the NINGBO HENGSHUAI stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

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 HENGSHUAI , and understanding them should be part of your investment process.

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.