Individual investors invested in Shaanxi Construction Machinery Co.,Ltd (SHSE:600984) copped the brunt of last week's CN¥440m market cap decline

Key Insights

• Shaanxi Construction MachineryLtd's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• A total of 16 investors have a majority stake in the company with 50% ownership
• Using data from company's past performance alongside ownership research, one can better assess the future performance of a company

To get a sense of who is truly in control of Shaanxi Construction Machinery Co.,Ltd (SHSE:600984), it is important to understand the ownership structure of the business. We can see that individual investors own the lion's share in the company with 49% ownership. Put another way, the group faces the maximum upside potential (or downside risk).

And following last week's 11% decline in share price, individual investors suffered the most losses.

Let's delve deeper into each type of owner of Shaanxi Construction MachineryLtd, beginning with the chart below.

Check out our latest analysis for Shaanxi Construction MachineryLtd

What Does The Institutional Ownership Tell Us About Shaanxi Construction MachineryLtd?

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.

We can see that Shaanxi Construction MachineryLtd 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 Shaanxi Construction MachineryLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Shaanxi Construction MachineryLtd. Looking at our data, we can see that the largest shareholder is Shaanxi Coal and Chemical Industry Group Co.,Ltd. with 30% of shares outstanding. With 6.9% and 4.0% of the shares outstanding respectively, Zhao Yi Chai and Shaanxi Construction Machinery (Group) Co., Ltd. are the second and third largest shareholders.

Looking at the shareholder registry, we can see that 50% of the ownership is controlled by the top 16 shareholders, meaning that no single shareholder has a majority interest in the ownership.

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

Insider Ownership Of Shaanxi Construction MachineryLtd

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.

Our most recent data indicates that insiders own some shares in Shaanxi Construction Machinery Co.,Ltd. It has a market capitalization of just CN¥3.5b, and insiders have CN¥288m worth of shares, in their own names. This shows at least some alignment. 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 49% stake in Shaanxi Construction MachineryLtd. 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 34%, 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:

It's always worth thinking about the different groups who own shares in a company. But to understand Shaanxi Construction MachineryLtd better, we need to consider many other factors. For example, we've discovered 3 warning signs for Shaanxi Construction MachineryLtd that you should be aware of before investing here.

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.