Himile Mechanical Science and Technology (Shandong) Co., Ltd (SZSE:002595) insiders have significant skin in the game with 57% ownership

Key Insights

• Significant insider control over Himile Mechanical Science and Technology (Shandong) implies vested interests in company growth
• 51% of the business is held by the top 3 shareholders
• Institutional ownership in Himile Mechanical Science and Technology (Shandong) is 14%

If you want to know who really controls Himile Mechanical Science and Technology (Shandong) Co., Ltd (SZSE:002595), then you'll have to look at the makeup of its share registry. The group holding the most number of shares in the company, around 57% to be precise, is individual insiders. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

With such a notable stake in the company, insiders would be highly incentivised to make value accretive decisions.

Let's delve deeper into each type of owner of Himile Mechanical Science and Technology (Shandong), beginning with the chart below.

See our latest analysis for Himile Mechanical Science and Technology (Shandong)

What Does The Institutional Ownership Tell Us About Himile Mechanical Science and Technology (Shandong)?

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 Himile Mechanical Science and Technology (Shandong). 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. 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 Himile Mechanical Science and Technology (Shandong)'s historic earnings and revenue below, but keep in mind there's always more to the story.

Himile Mechanical Science and Technology (Shandong) is not owned by hedge funds. Our data shows that Gongyun Zhang is the largest shareholder with 30% of shares outstanding. With 14% and 6.7% of the shares outstanding respectively, Shengjun Liu and Yongxing Zang are the second and third largest shareholders.

To make our study more interesting, we found that the top 3 shareholders have a majority ownership in the company, meaning that they are powerful enough to influence the decisions of the company.

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. Quite a few analysts cover the stock, so you could look into forecast growth quite easily.

Insider Ownership Of Himile Mechanical Science and Technology (Shandong)

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.

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.

Our information suggests that insiders own more than half of Himile Mechanical Science and Technology (Shandong) Co., Ltd. This gives them effective control of the company. Given it has a market cap of CN¥40b, that means insiders have a whopping CN¥23b worth of shares in their own names. Most would be pleased to see the board is investing alongside them. You may wish to discover if they have been buying or selling.

General Public Ownership

With a 29% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Himile Mechanical Science and Technology (Shandong). 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For example, we've discovered 1 warning sign for Himile Mechanical Science and Technology (Shandong) that you should be aware of before investing here.

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.