Qingdao Daneng Environmental Protection Equipment Co., Ltd.'s (SHSE:688501) 11% gain last week benefited both retail investors who own 46% as well as insiders

Key Insights

• Significant control over Qingdao Daneng Environmental Protection Equipment by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 15 shareholders own 50% of the company
• 27% of Qingdao Daneng Environmental Protection Equipment is held by insiders

If you want to know who really controls Qingdao Daneng Environmental Protection Equipment Co., Ltd. (SHSE:688501), then you'll have to look at the makeup of its share registry. With 46% stake, retail investors 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).

Retail investors gained the most after market cap touched CN¥1.8b last week, while insiders who own 27% also benefitted.

In the chart below, we zoom in on the different ownership groups of Qingdao Daneng Environmental Protection Equipment.

See our latest analysis for Qingdao Daneng Environmental Protection Equipment

What Does The Institutional Ownership Tell Us About Qingdao Daneng Environmental Protection Equipment?

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.

As you can see, institutional investors have a fair amount of stake in Qingdao Daneng Environmental Protection Equipment. This suggests some credibility amongst professional investors. But we can't rely on that fact alone since institutions make bad investments sometimes, just like everyone does. 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 Qingdao Daneng Environmental Protection Equipment's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Qingdao Daneng Environmental Protection Equipment. Our data shows that Yong Wang is the largest shareholder with 17% of shares outstanding. For context, the second largest shareholder holds about 7.6% of the shares outstanding, followed by an ownership of 5.7% by the third-largest shareholder. Yanhui Liu, who is the third-largest shareholder, also happens to hold the title of Member of the Board of Directors.

After doing some more digging, we found that the top 15 have the combined ownership of 50% in the company, suggesting that no single shareholder has significant control over the company.

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. 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 Qingdao Daneng Environmental Protection Equipment

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 Qingdao Daneng Environmental Protection Equipment Co., Ltd.. Insiders own CN¥501m worth of shares in the CN¥1.8b company. We would say this shows alignment with shareholders, but it is worth noting that the company is still quite small; some insiders may have founded the business. You can click here to see if those insiders have been buying or selling.

General Public Ownership

With a 46% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Qingdao Daneng Environmental Protection Equipment. 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.

Public Company Ownership

It appears to us that public companies own 7.6% of Qingdao Daneng Environmental Protection Equipment. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. Be aware that Qingdao Daneng Environmental Protection Equipment is showing 2 warning signs in our investment analysis , and 1 of those is potentially serious...

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.

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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.