Zhejiang Haiyan Power System Resources Environmental Technology Co.,Ltd.'s (SHSE:688565) stock price dropped 14% last week; individual investors would not be happy

Key Insights

• The considerable ownership by individual investors in Zhejiang Haiyan Power System Resources Environmental TechnologyLtd indicates that they collectively have a greater say in management and business strategy
• 45% of the business is held by the top 24 shareholders
• Insider ownership in Zhejiang Haiyan Power System Resources Environmental TechnologyLtd is 38%

A look at the shareholders of Zhejiang Haiyan Power System Resources Environmental Technology Co.,Ltd. (SHSE:688565) can tell us which group is most powerful. The group holding the most number of shares in the company, around 55% to be precise, is individual investors. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

While insiders, who own 38% shares weren’t spared from last week’s CN¥155m market cap drop, individual investors as a group suffered the maximum losses

In the chart below, we zoom in on the different ownership groups of Zhejiang Haiyan Power System Resources Environmental TechnologyLtd.

See our latest analysis for Zhejiang Haiyan Power System Resources Environmental TechnologyLtd

What Does The Institutional Ownership Tell Us About Zhejiang Haiyan Power System Resources Environmental TechnologyLtd?

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.

Since institutions own only a small portion of Zhejiang Haiyan Power System Resources Environmental TechnologyLtd, many may not have spent much time considering the stock. But it's clear that some have; and they liked it enough to buy in. If the business gets stronger from here, we could see a situation where more institutions are keen to buy. We sometimes see a rising share price when a few big institutions want to buy a certain stock at the same time. The history of earnings and revenue, which you can see below, could be helpful in considering if more institutional investors will want the stock. Of course, there are plenty of other factors to consider, too.

Hedge funds don't have many shares in Zhejiang Haiyan Power System Resources Environmental TechnologyLtd. The company's largest shareholder is Wanzhong Shen, with ownership of 32%. Meanwhile, the second and third largest shareholders, hold 4.4% and 2.9%, of the shares outstanding, respectively.

A deeper look at our ownership data shows that the top 24 shareholders collectively hold less than half of the register, suggesting a large group of small holders where no single shareholder has a majority.

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. As far as we can tell there isn't analyst coverage of the company, so it is probably flying under the radar.

Insider Ownership Of Zhejiang Haiyan Power System Resources Environmental TechnologyLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 information suggests that insiders maintain a significant holding in Zhejiang Haiyan Power System Resources Environmental Technology Co.,Ltd.. It has a market capitalization of just CN¥915m, and insiders have CN¥344m worth of shares in their own names. 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

The general public, who are usually individual investors, hold a substantial 55% stake in Zhejiang Haiyan Power System Resources Environmental TechnologyLtd, suggesting it is a fairly popular stock. This size of ownership gives investors from the general public some collective power. They can and probably do influence decisions on executive compensation, dividend policies and proposed business acquisitions.

Private Company Ownership

It seems that Private Companies own 4.4%, of the Zhejiang Haiyan Power System Resources Environmental TechnologyLtd stock. 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 Zhejiang Haiyan Power System Resources Environmental TechnologyLtd better, we need to consider many other factors. Take risks for example - Zhejiang Haiyan Power System Resources Environmental TechnologyLtd has 1 warning sign we think you should be aware of.

Of course this may not be the best stock to buy. So take a peek at this free free list of interesting companies.

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.