Private companies are Xiamen XGMA Machinery Company Limited's (SHSE:600815) biggest owners and were rewarded after market cap rose by CN¥603m last week

Key Insights

• The considerable ownership by private companies in Xiamen XGMA Machinery indicates that they collectively have a greater say in management and business strategy
• 54% of the business is held by the top 2 shareholders
• 21% of Xiamen XGMA Machinery is held by Institutions

If you want to know who really controls Xiamen XGMA Machinery Company Limited (SHSE:600815), 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 49% to be precise, is private companies. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, private companies benefitted the most after the company's market cap rose by CN¥603m last week.

Let's delve deeper into each type of owner of Xiamen XGMA Machinery, beginning with the chart below.

View our latest analysis for Xiamen XGMA Machinery

What Does The Institutional Ownership Tell Us About Xiamen XGMA Machinery?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

We can see that Xiamen XGMA Machinery 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 Xiamen XGMA Machinery's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Xiamen XGMA Machinery. Xiamen ITG Holding Group Co., Ltd. is currently the largest shareholder, with 47% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.8% and 4.4% of the stock.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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. We're not picking up on any analyst coverage of the stock at the moment, so the company is unlikely to be widely held.

Insider Ownership Of Xiamen XGMA Machinery

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.

Insider ownership is positive when it signals leadership are thinking like the true owners of the company. However, high insider ownership can also give immense power to a small group within the company. This can be negative in some circumstances.

Our information suggests that Xiamen XGMA Machinery Company Limited insiders own under 1% of the company. But they may have an indirect interest through a corporate structure that we haven't picked up on. It has a market capitalization of just CN¥4.1b, and the board has only CN¥35k worth of shares in their own names. Many tend to prefer to see a board with bigger shareholdings. A good next step might be to take a look at this free summary of insider buying and selling.

General Public Ownership

With a 30% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Xiamen XGMA Machinery. 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 49%, of the Xiamen XGMA Machinery stock. 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Xiamen XGMA Machinery better, we need to consider many other factors.

I like to dive deeper into how a company has performed in the past. You can access this interactive graph of past earnings, revenue and cash flow, for free.

Of course, you might find a fantastic investment by looking elsewhere. So take a peek at this free list of interesting companies.

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.