Hunan Yuneng New Energy Battery Material Co.,Ltd.'s (SZSE:301358) stock price dropped 11% last week; retail investors would not be happy

Key Insights

• The considerable ownership by retail investors in Hunan Yuneng New Energy Battery MaterialLtd indicates that they collectively have a greater say in management and business strategy
• 51% of the business is held by the top 8 shareholders
• Institutions own 11% of Hunan Yuneng New Energy Battery MaterialLtd

To get a sense of who is truly in control of Hunan Yuneng New Energy Battery Material Co.,Ltd. (SZSE:301358), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are retail investors with 36% ownership. That is, the group stands to benefit the most if the stock rises (or lose the most if there is a downturn).

And last week, retail investors endured the biggest losses as the stock fell by 11%.

Let's take a closer look to see what the different types of shareholders can tell us about Hunan Yuneng New Energy Battery MaterialLtd.

See our latest analysis for Hunan Yuneng New Energy Battery MaterialLtd

What Does The Institutional Ownership Tell Us About Hunan Yuneng New Energy Battery MaterialLtd?

Institutional investors commonly compare their own returns to the returns of a commonly followed index. So they generally do consider buying larger companies that are included in the relevant benchmark index.

As you can see, institutional investors have a fair amount of stake in Hunan Yuneng New Energy Battery MaterialLtd. This can indicate that the company has a certain degree of credibility in the investment community. However, it is best to be wary of relying on the supposed validation that comes with institutional investors. They too, get it wrong sometimes. 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 Hunan Yuneng New Energy Battery MaterialLtd's historic earnings and revenue below, but keep in mind there's always more to the story.

Hedge funds don't have many shares in Hunan Yuneng New Energy Battery MaterialLtd. Xiangtan Electric Manufacturing Group Co., Ltd. is currently the largest shareholder, with 10% of shares outstanding. The second and third largest shareholders are Shanghai Jinsheng New Material Technology Co., Ltd. and Contemporary Amperex Technology Co., Limited, with an equal amount of shares to their name at 7.9%.

We also observed that the top 8 shareholders account for more than half of the share register, with a few smaller shareholders to balance the interests of the larger ones to a certain extent.

While it makes sense to study institutional ownership data for a company, it also makes sense to study analyst sentiments to know which way the wind is blowing. 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 Hunan Yuneng New Energy Battery MaterialLtd

The definition of an insider can differ slightly between different countries, but members of the board of directors always count. 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.

We can see that insiders own shares in Hunan Yuneng New Energy Battery Material Co.,Ltd.. It is a pretty big company, so it is generally a positive to see some potentially meaningful alignment. In this case, they own around CN¥670m worth of shares (at current prices). It is good to see this level of investment by insiders. You can check here to see if those insiders have been buying recently.

General Public Ownership

With a 36% ownership, the general public, mostly comprising of individual investors, have some degree of sway over Hunan Yuneng New Energy Battery MaterialLtd. 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.

Private Company Ownership

It seems that Private Companies own 32%, of the Hunan Yuneng New Energy Battery MaterialLtd 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.

Public Company Ownership

It appears to us that public companies own 18% of Hunan Yuneng New Energy Battery MaterialLtd. It's hard to say for sure but this suggests they have entwined business interests. This might be a strategic stake, so it's worth watching this space for changes in ownership.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Hunan Yuneng New Energy Battery MaterialLtd better, we need to consider many other factors. Consider for instance, the ever-present spectre of investment risk. We've identified 1 warning sign with Hunan Yuneng New Energy Battery MaterialLtd , and understanding them should be part of your investment process.

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.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email editorial-team@simplywallst.com