The recent pullback must have dismayed Sichuan Injet Electric Co., Ltd. (SZSE:300820) insiders who own 67% of the company

Key Insights

• Insiders appear to have a vested interest in Sichuan Injet Electric's growth, as seen by their sizeable ownership
• The top 2 shareholders own 67% of the company
• Institutions own 14% of Sichuan Injet Electric

To get a sense of who is truly in control of Sichuan Injet Electric Co., Ltd. (SZSE:300820), it is important to understand the ownership structure of the business. With 67% 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).

And following last week's 6.3% decline in share price, insiders suffered the most losses.

Let's take a closer look to see what the different types of shareholders can tell us about Sichuan Injet Electric.

Check out our latest analysis for Sichuan Injet Electric

What Does The Institutional Ownership Tell Us About Sichuan Injet Electric?

Many institutions measure their performance against an index that approximates the local market. So they usually pay more attention to companies that are included in major indices.

As you can see, institutional investors have a fair amount of stake in Sichuan Injet Electric. 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 Sichuan Injet Electric's historic earnings and revenue below, but keep in mind there's always more to the story.

We note that hedge funds don't have a meaningful investment in Sichuan Injet Electric. Jun Wang is currently the largest shareholder, with 34% of shares outstanding. Yinghuai Zhou is the second largest shareholder owning 33% of common stock, and Galaxy Asset Management Co. Ltd. holds about 2.2% of the company stock. Yinghuai Zhou, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

After doing some more digging, we found that the top 2 shareholders collectively control more than half of the company's shares, implying that they have considerable power to influence the company's decisions.

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 Sichuan Injet Electric

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 information suggests that insiders own more than half of Sichuan Injet Electric Co., Ltd.. This gives them effective control of the company. Insiders own CN¥5.6b worth of shares in the CN¥8.4b company. That's extraordinary! 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 19% stake in Sichuan Injet Electric. 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. Case in point: We've spotted 3 warning signs for Sichuan Injet Electric you should be aware of, and 1 of them is a bit unpleasant.

But ultimately it is the future, not the past, that will determine how well the owners of this business will do. Therefore we think it advisable to take a look at this free report showing whether analysts are predicting a brighter 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.