Xianheng International Science&Technology Co., Ltd.'s (SHSE:605056) stock price dropped 10.0% last week; private companies would not be happy

Key Insights

• Xianheng International Science&Technology's significant private companies ownership suggests that the key decisions are influenced by shareholders from the larger public
• The top 4 shareholders own 52% of the company
• 23% of Xianheng International Science&Technology is held by insiders

A look at the shareholders of Xianheng International Science&Technology Co., Ltd. (SHSE:605056) can tell us which group is most powerful. With 48% stake, private companies possess the maximum shares in the company. Put another way, the group faces the maximum upside potential (or downside risk).

While insiders who own 23% came under pressure after market cap dropped to CN¥4.8b last week,private companies took the most losses.

In the chart below, we zoom in on the different ownership groups of Xianheng International Science&Technology.

See our latest analysis for Xianheng International Science&Technology

What Does The Institutional Ownership Tell Us About Xianheng International Science&Technology?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

We can see that Xianheng International Science&Technology 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. 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 Xianheng International Science&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 Xianheng International Science&Technology. Laixing Wang is currently the largest shareholder, with 20% of shares outstanding. With 15% and 8.4% of the shares outstanding respectively, Hangzhou Xianning Investment Partnership Enterprise (Limited Partnership) and Shaoxing Xianheng Group Co., Ltd. are the second and third largest shareholders.

On looking further, we found that 52% of the shares are owned by the top 4 shareholders. In other words, these shareholders have a meaningful say in 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. There is a little analyst coverage of the stock, but not much. So there is room for it to gain more coverage.

Insider Ownership Of Xianheng International Science&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.

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 a reasonable proportion of Xianheng International Science&Technology Co., Ltd.. It has a market capitalization of just CN¥4.8b, and insiders have CN¥1.1b worth of shares in their own names. It is great to see insiders so invested in the business. It might be worth checking if those insiders have been buying recently.

General Public Ownership

The general public, who are usually individual investors, hold a 21% stake in Xianheng International Science&Technology. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 48%, of the shares on issue. It might be worth looking deeper into this. If related parties, such as insiders, have an interest in one of these private companies, that should be disclosed in the annual report. Private companies may also have a strategic interest in the company.

Next Steps:

I find it very interesting to look at who exactly owns a company. But to truly gain insight, we need to consider other information, too. Consider for instance, the ever-present spectre of investment risk. We've identified 3 warning signs with Xianheng International Science&Technology , and understanding them should be part of your investment process.

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.