Wuhan Tianyuan Environmental Protection Co.,LTD's (SZSE:301127) market cap dropped CN¥1.2b last week; Individual investors bore the brunt

Key Insights

• Wuhan Tianyuan Environmental ProtectionLTD's significant individual investors ownership suggests that the key decisions are influenced by shareholders from the larger public
• 53% of the business is held by the top 4 shareholders
• 11% of Wuhan Tianyuan Environmental ProtectionLTD is held by Institutions

To get a sense of who is truly in control of Wuhan Tianyuan Environmental Protection Co.,LTD (SZSE:301127), it is important to understand the ownership structure of the business. And the group that holds the biggest piece of the pie are individual investors with 37% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

And following last week's 11% decline in share price, individual investors suffered the most losses.

In the chart below, we zoom in on the different ownership groups of Wuhan Tianyuan Environmental ProtectionLTD.

View our latest analysis for Wuhan Tianyuan Environmental ProtectionLTD

What Does The Institutional Ownership Tell Us About Wuhan Tianyuan Environmental ProtectionLTD?

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.

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

Hedge funds don't have many shares in Wuhan Tianyuan Environmental ProtectionLTD. Hubei Tianyuan Environmental Protection Group Co., Ltd. is currently the largest shareholder, with 33% of shares outstanding. In comparison, the second and third largest shareholders hold about 14% and 3.5% of the stock. In addition, we found that Zhaowei Huang, the CEO has 0.9% of the shares allocated to their name.

To make our study more interesting, we found that the top 4 shareholders control more than half of the company which implies that this group has considerable sway over the company's decision-making.

Researching institutional ownership is a good way to gauge and filter a stock's expected performance. The same can be achieved by studying analyst sentiments. 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 Wuhan Tianyuan Environmental ProtectionLTD

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.

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 report that insiders do own shares in Wuhan Tianyuan Environmental Protection Co.,LTD. The insiders have a meaningful stake worth CN¥195m. Most would see this as a real positive. If you would like to explore the question of insider alignment, you can click here to see if insiders have been buying or selling.

General Public Ownership

The general public, who are usually individual investors, hold a 37% stake in Wuhan Tianyuan Environmental ProtectionLTD. While this group can't necessarily call the shots, it can certainly have a real influence on how the company is run.

Private Company Ownership

We can see that Private Companies own 37%, of the shares on issue. 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.

Public Company Ownership

Public companies currently own 14% of Wuhan Tianyuan Environmental ProtectionLTD stock. This may be a strategic interest and the two companies may have related business interests. It could be that they have de-merged. This holding is probably worth investigating further.

Next Steps:

It's always worth thinking about the different groups who own shares in a company. But to understand Wuhan Tianyuan Environmental ProtectionLTD better, we need to consider many other factors. Like risks, for instance. Every company has them, and we've spotted 4 warning signs for Wuhan Tianyuan Environmental ProtectionLTD (of which 1 is significant!) you should know about.

If you would prefer check out another company -- one with potentially superior financials -- then do not miss this free list of interesting companies, backed by strong financial data.

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.