Delixi New Energy Technology Co., Ltd.'s (SHSE:603032) biggest owners are private companies who got richer after stock soared 18% last week

Key Insights

• Significant control over Delixi New Energy Technology by private companies implies that the general public has more power to influence management and governance-related decisions
• The top 2 shareholders own 54% of the company
• Institutional ownership in Delixi New Energy Technology is 10%

To get a sense of who is truly in control of Delixi New Energy Technology Co., Ltd. (SHSE:603032), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are private companies with 54% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

As a result, private companies were the biggest beneficiaries of last week’s 18% gain.

In the chart below, we zoom in on the different ownership groups of Delixi New Energy Technology.

Check out our latest analysis for Delixi New Energy Technology

What Does The Institutional Ownership Tell Us About Delixi New Energy Technology?

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 Delixi New Energy Technology does have institutional investors; and they hold a good portion of the company's stock. 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. 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 Delixi New Energy Technology'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 Delixi New Energy Technology. Delixi Group Company Limited is currently the largest shareholder, with 48% of shares outstanding. In comparison, the second and third largest shareholders hold about 6.3% and 3.7% of the stock.

To make our study more interesting, we found that the top 2 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence 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. While there is some analyst coverage, the company is probably not widely covered. So it could gain more attention, down the track.

Insider Ownership Of Delixi New Energy Technology

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. Management ultimately answers to the board. However, it is not uncommon for managers to be executive board members, especially if they are a founder or the CEO.

I generally consider insider ownership to be a good thing. However, on some occasions it makes it more difficult for other shareholders to hold the board accountable for decisions.

Shareholders would probably be interested to learn that insiders own shares in Delixi New Energy Technology Co., Ltd.. In their own names, insiders own CN¥43m worth of stock in the CN¥3.0b company. 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 34% stake in Delixi New Energy Technology. 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

Our data indicates that Private Companies hold 54%, of the company's shares. 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.

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.

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.

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