Following recent decline, Riyue Heavy Industry Co.,Ltd's (SHSE:603218) top shareholder CEO Ming Kang Fu sees holdings value drop by 6.1%

Key Insights

• Significant insider control over Riyue Heavy IndustryLtd implies vested interests in company growth
• The top 2 shareholders own 51% of the company
• 18% of Riyue Heavy IndustryLtd is held by Institutions

If you want to know who really controls Riyue Heavy Industry Co.,Ltd (SHSE:603218), then you'll have to look at the makeup of its share registry. With 51% stake, individual insiders possess the maximum shares in the company. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

As a result, insiders as a group endured the highest losses after market cap fell by CN¥745m.

Let's delve deeper into each type of owner of Riyue Heavy IndustryLtd, beginning with the chart below.

See our latest analysis for Riyue Heavy IndustryLtd

What Does The Institutional Ownership Tell Us About Riyue Heavy IndustryLtd?

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.

Riyue Heavy IndustryLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Riyue Heavy IndustryLtd's earnings history below. Of course, the future is what really matters.

We note that hedge funds don't have a meaningful investment in Riyue Heavy IndustryLtd. The company's CEO Ming Kang Fu is the largest shareholder with 40% of shares outstanding. In comparison, the second and third largest shareholders hold about 11% and 9.0% of the stock.

A more detailed study of the shareholder registry showed us that 2 of the top shareholders have a considerable amount of ownership in the company, via their 51% stake.

While studying institutional ownership for a company can add value to your research, it is also a good practice to research analyst recommendations to get a deeper understand of a stock's expected performance. There are a reasonable number of analysts covering the stock, so it might be useful to find out their aggregate view on the future.

Insider Ownership Of Riyue Heavy IndustryLtd

The definition of company insiders can be subjective and does vary between jurisdictions. Our data reflects individual insiders, capturing board members at the very least. 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.

Our most recent data indicates that insiders own the majority of Riyue Heavy Industry Co.,Ltd. This means they can collectively make decisions for the company. Given it has a market cap of CN¥12b, that means insiders have a whopping CN¥5.9b worth of shares in their own names. It is good to see this level of investment. You can check here to see if those insiders have been selling any of their shares.

General Public Ownership

The general public, who are usually individual investors, hold a 31% stake in Riyue Heavy IndustryLtd. 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.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Riyue Heavy IndustryLtd better, we need to consider many other factors. For instance, we've identified 2 warning signs for Riyue Heavy IndustryLtd (1 is significant) that you should be aware of.

If you are like me, you may want to think about whether this company will grow or shrink. Luckily, you can check this free report showing analyst forecasts for its future.

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.