Public companies among Ferrotec (An Hui) Technology Development Co.,LTD's (SZSE:301297) largest shareholders, saw gain in holdings value after stock jumped 6.4% last week

Key Insights

• Significant control over Ferrotec (An Hui) Technology DevelopmentLTD by public companies implies that the general public has more power to influence management and governance-related decisions
• The largest shareholder of the company is Ferrotec Holdings Corporation with a 50% stake
• Institutional ownership in Ferrotec (An Hui) Technology DevelopmentLTD is 13%

A look at the shareholders of Ferrotec (An Hui) Technology Development Co.,LTD (SZSE:301297) can tell us which group is most powerful. And the group that holds the biggest piece of the pie are public companies with 53% ownership. In other words, the group stands to gain the most (or lose the most) from their investment into the company.

Clearly, public companies benefitted the most after the company's market cap rose by CN¥423m last week.

Let's take a closer look to see what the different types of shareholders can tell us about Ferrotec (An Hui) Technology DevelopmentLTD.

View our latest analysis for Ferrotec (An Hui) Technology DevelopmentLTD

What Does The Institutional Ownership Tell Us About Ferrotec (An Hui) Technology DevelopmentLTD?

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.

Ferrotec (An Hui) Technology DevelopmentLTD 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. 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 Ferrotec (An Hui) Technology DevelopmentLTD's historic earnings and revenue below, but keep in mind there's always more to the story.

Ferrotec (An Hui) Technology DevelopmentLTD is not owned by hedge funds. The company's largest shareholder is Ferrotec Holdings Corporation, with ownership of 50%. With such a huge stake in the ownership, we infer that they have significant control of the future of the company. With 5.9% and 3.6% of the shares outstanding respectively, Shanghai Zuzhen Enterprise Management Center (Limited Partnership) and Hangzhou Bohan Asset Management Co., Ltd. are the second and third largest shareholders.

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. 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 Ferrotec (An Hui) Technology DevelopmentLTD

While the precise definition of an insider can be subjective, almost everyone considers board members to be insiders. The company management answer to the board and the latter should represent the interests of shareholders. Notably, sometimes top-level managers are on the board themselves.

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 note our data does not show any board members holding shares, personally. Given we are not picking up on insider ownership, we may have missing data. Therefore, it would be interesting to assess the CEO compensation and tenure, here.

General Public Ownership

The general public-- including retail investors -- own 22% stake in the company, and hence can't easily be ignored. 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 12%, of the Ferrotec (An Hui) Technology DevelopmentLTD stock. Private companies may be related parties. Sometimes insiders have an interest in a public company through a holding in a private company, rather than in their own capacity as an individual. While it's hard to draw any broad stroke conclusions, it is worth noting as an area for further research.

Public Company Ownership

It appears to us that public companies own 53% of Ferrotec (An Hui) Technology DevelopmentLTD. 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 Ferrotec (An Hui) Technology DevelopmentLTD better, we need to consider many other factors. Be aware that Ferrotec (An Hui) Technology DevelopmentLTD is showing 1 warning sign in our investment analysis , you should know about...

Of course this may not be the best stock to buy. Therefore, you may wish to see our free collection of interesting prospects boasting favorable financials.

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