Sineng Electric Co.,Ltd.'s (SZSE:300827) market cap dropped CN¥593m last week; Retail investors bore the brunt

Key Insights

• Significant control over Sineng ElectricLtd by retail investors implies that the general public has more power to influence management and governance-related decisions
• The top 9 shareholders own 50% of the company
• Insiders own 36% of Sineng ElectricLtd

To get a sense of who is truly in control of Sineng Electric Co.,Ltd. (SZSE:300827), it is important to understand the ownership structure of the business. With 43% stake, retail investors possess the maximum shares in the company. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

While insiders who own 36% came under pressure after market cap dropped to CN¥14b last week,retail investors took the most losses.

Let's delve deeper into each type of owner of Sineng ElectricLtd, beginning with the chart below.

Check out our latest analysis for Sineng ElectricLtd

What Does The Institutional Ownership Tell Us About Sineng ElectricLtd?

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.

Sineng ElectricLtd already has institutions on the share registry. Indeed, they own a respectable stake in the company. 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 Sineng ElectricLtd's earnings history below. Of course, the future is what really matters.

Hedge funds don't have many shares in Sineng ElectricLtd. Looking at our data, we can see that the largest shareholder is Qiang Wu with 20% of shares outstanding. For context, the second largest shareholder holds about 8.9% of the shares outstanding, followed by an ownership of 8.4% by the third-largest shareholder. Yuhe Duan, who is the second-largest shareholder, also happens to hold the title of Chief Executive Officer.

We did some more digging and found that 9 of the top shareholders account for roughly 50% of the register, implying that along with larger shareholders, there are a few smaller shareholders, thereby balancing out each others interests somewhat.

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 Sineng ElectricLtd

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. 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 Sineng Electric Co.,Ltd.. It has a market capitalization of just CN¥14b, and insiders have CN¥5.1b worth of shares in their own names. That's quite significant. It is good to see this level of investment. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 43% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Sineng ElectricLtd. 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.

Private Company Ownership

It seems that Private Companies own 14%, of the Sineng ElectricLtd stock. 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:

While it is well worth considering the different groups that own a company, there are other factors that are even more important. For instance, we've identified 2 warning signs for Sineng ElectricLtd (1 makes us a bit uncomfortable) that you should be aware of.

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.